A proverb in my area says when a fowl is slaughtered , its mates should be weary because the knife deployed for the job would soon find their throat. It may be another bird on the slaughter slab today, it could be the bystanders tomorrow. Every time I see pensioners on the queue to verify their status or protest unpaid arrears, I shudder to think what would become of me when I get to that stage. Pensioners in the private sector, where I have operated, do not seem to have fallen to the deplorable level their counterparts in the public sector. The snag, for now, is that some companies have made a habit of defaulting in remitting what they took as pension contribution from their staff. The Director- General of National Pension Commission Mrs Chinelo Anohu- Amazu admits that some employers fall foul of the law in that respect.
According to her, a lot of efforts are being made to get non compliant companies to do so. In spite of non compliance issues, the DG, in a paper presented at a Mandatory Continuos Professional Development Programme of the Nigerian Institution of Estate Surveyors and Valuers, recently, revealed that total pension assets had hit N5.1 trillion. She also admitted that the Pension Reforms Act as reviewed in 2014, provided for increased investment of pensions fund in infrastructure and housing development. The act also allowed for a percentage of contributing workers’ Retirement Savings Accounts[RSA] balance to be used as equity contribution for mortgage.
Pencom decried that out of the N1.6tn pension fund assets available for investment in infrastructure, only N1.36bn had so far been invested in infrastructure bonds. This, according to the commission, leaves about N1.159tn idle and unable to be invested in the provision of critical infrastructural projects.
I understand Pencom is willing to dole out funds for infrastructural development in accordance with the act. I do not understand the dynamics of the proposed move, but there may be a tendency for government to see another cash cow in pension funds.
That is rather scary. The advocacy has been rife that pension funds be deployed for such infrastructure as power, housing and so on. Minister of Power, Works and Housing, Mr Babatunde Fashola, has also advocated use of pension funds to finance infrastructural development in the country. But I suggest we tread with caution on this path. In these days of cash crunch, government must resist the temptation to see cheap and easy funds in pension savings. The result of ‘borrowing’ that money is scary. There is a frying-pan-to-fire scenario if pensioners go back to being owed, even in the new dispensation. They forfeited part of their salary for that purpose.
The comments of Finance Minister, Mrs, Kemi Adeosun is reassuring. she says: ‘A lot has been said about the pension money. we have six trillion naira pension funds and people treat it as if it’s just available for the taking. This is people’s future savings, so we have to be very cautious about how we release pension funds for investment. The first thing we have to do is to relax the rules cautiously and with many safeguards so we don’t lose pensioner’s money and cause problem in the future. we are going to put things in place such as the infrastructure bond that we are releasing that will encourage pension funds to invest, but do so safely’
The minister of Finance is right. Those who manage the pension funds must apply caution. There is a dilemma in having such huge funds and still have infrastructural deficit as exist in our clime. Money ought not lie idle when it can be deployed to solve critical problems. But the fate of pensioners should not hang in the balance. They have saved part of their salary to fall back on when they leave paid employment. The government must not see that as cheap money, yet the money should not stack up in the face of poor infrastructure in power sector, housing and other critical areas. What happens if the money goes down the drain? The owners would pine away in penury and die in sorrow? That must not happen. The woman who over sees National Pension Commission has lived up to her billing and I do hope that the minister of Finance would not be pushed by political pressure to lay down her guard. Pension money must be treated with caution. Inflation has often made nonsense of pension savings, but the matter would be compounded by deploying the funds into the bottomless pits.