The introduction of the Pension Reform Act was perceived by many to be a step in the right direction, towards addressing the malaise in the sector. But there are two sides to a coin. Nanna Selkur takes a look at the unpopular side of the Act and the way forward
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When the Pension Reform Act of 2004 kicked off in July 2004, during president Olusegun Obansanjo’s administration, public sector workers expressed happiness as they thought it would bring to an end the many problems that were hitherto the lot of pension administration in the country.
Before this time, retirement was a nightmare for public servants, as there was no guarantee that your pension would be paid regularly when you retired.
Old retirees visiting the office of the head of service of the federation to pursue payment of their pension and gratuity often went through torturous experiences in the hands of the staff of the office.
Unknown to many, the joy was rather short lived and perhaps what was more worrisome, was the limitation of the scheme.
LEADERSHIP investigation revealed that government ministries and the National Pension Commission (PENCOM) have been found to be most culpable in the administration of pension services, even as the Pension Fund Administrators (PFA) share a part of the blame.
A visit to one of the PFA’s revealed that unknown to many and contrary to the claim by PENCOM that retirees are entitled to a life time benefit from pension contribution, male retirees are entitled to 16 years pension after retirement, while women are entitled to 18 years pension benefit after retirement.
The question that seems to go unanswered by the relevant agencies is who takes care of a retiree when he or she is no longer entitled to any pension from the government, after rendering meritorious service for 35 years or less, depending on the organisation concerned.
Our correspondent also gathered that cases of unbalanced pension accounts as reflected in workers’ pension account statements were as a result of delay on the part of the organisations to send their workers emoluments after verification, to PENCOM.
PENCOM on the other hand, it was discovered, also delays in sending bonds to the PFAs, resulting in irreconcilable account statements presented to would be pensioners, while the bank accounts of the pensioners remain dormant for several months and sometimes years.
On enquires, LEADERSHIP gathered that among the categories of those that suffer the most in terms of redundant accounts are the military and police pensioners
A business consultant with one of the PFAs, Mr. Sunny Ibru, told LEADERSHIP that the way forward concerning the delay in the payment of pension to retirees, said the Pension Reform Act of 2004 needs to be reviewed.
He cited the case of a police officer who retired since 2009 but was yet to start receiving his pension and noted that if the Act is reviewed, it would address the special services being rendered by the police force and work out a plan for them.
Ibru who noted that a lot of police officers were suffering as a result of the incomprehensive structure of their pension scheme also spoke at length on the need to take into cognisance the plight of retired soldiers, despite their proposal to alienate themselves in the new pension structure.
While speaking with LEADERSHIP, a retired soldier, Mr Haruna yusuf said “the military pension scheme needs to be revisited. How can the military be the one bringing out money to pay pensioners and concurrently be in charge of managing the pension funds, one person can decide to divert the money for his selfish purpose.
“We need people who can manage these funds through investment so that we don’t have to travel as far as from Kano to Abuja, without receiving anything. That is if we insist on going back to the old pension scheme.”
Another retired soldier, Christopher Chukwu stated that the way forward as regard the setbacks experienced by military pensioners was to establish military pension centres in all the 36 states, including Abuja.
“When this is done, we won’t have to travel long distances to collect our pension. Moreover, we seem to have a lot of ghost retirees and that is why when they pay a few of us then they run out of funds and we would be asked to wait for a few hours, which sometimes extend to days and then weeks,” Chukwu said.
Mr Afolabi Ibekun, a staff of one of the pension custodian banks, said the agitation by the military to pull out of the new pension scheme was logical, based on the fact that there was nowhere in the world the military? were known to contribute to their pension, as stipulated in the new pension scheme.
He recalled that under the new scheme, the military were required to contribute two and a half per cent, while the government contributes 12 per cent of the pension sum, but said the agitation by some of the military pensioners to return to the old scheme would do them more harm than good.
Ibekun said the government needed to put in place special modalities as regards both the military and the police force pension structure, and added that since these people had taken it upon themselves to protect the nation by risking their lives, using the present situation of the country as an example, they deserved better treatment.
“It is imperative to address the difficulties these pensioners go through, if the government will contribute solely to their pension without them contributing some portion, and every military personnel is paid as long as he or she is alive, contrary to the provision of the new pension act, which stipulate that a person is paid for only 16 years after retirement.
It is not too much to ask for, considering the fact that they have taken it upon themselves to protect this nation,” he added.
Speaking further, Ibekun said a huge chunk of the N2.67 trillion which the federal government owed Nigerian pensioners was owed to military pensioners and warned that if the military insist on going back to the former pension scheme, the figure was bound to increase uncontrollably.
A business consultant at ARM pensions who spoke on the delay in payment on the part of the PFAs aid one of the key reasons why the next of kin to a deceased pensioner had to be subjected to a lot of paper presentation as well as having to wait for three months after the information about the deceased had been published was to avoid paying the wrong person,
The consultant who preferred anonymity said when the wrong person presents a letter of administration (which is what is required to pay the next of kin to a deceased) without the knowledge of the appropriate next of kin, they could in ignorance, pay the person.
“This is because the PFA at the moment don’t have documents to substantiate that this is actually the next of kin to a pensioner in the event of death, the only information they have is that of the pensioner,” he added.
While speaking on the relevance of the biometric data capturing, he said whenever the ministries, departments and agencies? have concluded the process, they should not delay to forward the data to PENCOM, and the commission should also not delay to do same to the various PFAs, as when this is done, cases of irregularities in pension administration would have being addressed.
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