Onyekwere Iwuagwu writes on the need to amend the Pension Reform Act to allow pension operators pay retirees the funds in their Retirement Savings Accounts in full

Narrating his ordeal, a 63 years old retiree under the Contributory Pension Scheme (name withheld) said: “When I retired from one of the federal ministries three years ago after 35 years in service, I was advised to approach my Pension Fund Administrator (PFA) (name withheld) for my retirement benefits.  My PFA said the balance in my Retirement Savings Account (RSA) as at that time was a little over N8 million and that I can only take about N2.5 million as lump sum.  The rest will be paid to me as monthly pension.

“Last year, I developed a life threatening illness, heart problem.  My Doctor said I will need about N5 million for surgery abroad to save my life.  I returned to my PFA to ask for the balance in my RSA to enable me pay for treatment abroad and I was told that I can’t take my money.  They said it is what the National Pension Commission (PenCom) approved for me and there is nothing they can do about it.  I went to PenCom but they said their hands are tied, that it is what the law said.”
“I contributed into the RSA so that I can take care of my needs in retirement.  Unfortunately, now that it matters most, when my life is hanging on a balance; they are telling me that I cannot take my own money to save my life.  They are telling me to leave my money for them and go and die so that they can steal my money like they have been stealing pension fund all along.

“What type of law is this? PenCom and the PFAs are using the so called pension law to defraud workers and retirees.  They deceived us into saving for comfort in retirement and now that we have retired they are devising ways to hold onto our money until we die and so they can steal it.  They said if I die, my family will collect the balance in my RSA, but who is more important, me that worked and saved the money or my children who are meant to inherit my assets when I die?  When we joined the scheme they said it will secure our future but now that I am retired and need my money the story has change.  This is pure deceit,” the retiree lamented.

The frustration of this retiree sums up the predicament of many retirees under the Contributory Pension Scheme (CPS), particularly those that are critically and terminally ill and those living with temporary and permanent disabilities.  They are very sick, they need bulk money to remain alive but their retirement savings which is enough to take care of their health needs is locked away by pension fund managers who prefer releasing the money for their funerals instead of allowing them to use it to save their lives.
The Contributory Pension Scheme originally holds out great prospects for Nigerian workers in it lay their hope for comfort in retirement.  But those prospects may have turned to nightmares for some retirees, particularly those suffering from temporary and permanent disabilities as well as those suffering from critical and terminal illnesses.
No pension fund manager or life insurer will deny the fact that retirees suffering any form of permanent disabilities, terminal and critical illnesses need all the money they can lay their hands on to treat themselves and live comfortably till death comes.  Unfortunately, this is not the situation with the Contributory Pension Scheme today, particularly for retirees living with critical illnesses.

Contributory Pension Scheme
Worried about old age poverty then, the Federal Government in 2004 enacted the Pension Reform Act, 2004; which established a uniform set of rules, regulations and standards for the administration and payment of retirement benefits to workers in both private and public sectors   Among other things, the law sought to address old age poverty, ensure that retirees get their monthly pension as and when due without stress and ensure that improvident individuals save to cater for their livelihood during old age.
With the repeal of the Pension Reform Act, 2004 and its replacement with the Pension Reform Act, 2014, the scheme was reinforced to deliver more benefits to Nigerian workers and retirees and created rooms for self-employed people and informal sector workers to be part of the scheme.  Retirees under the scheme are entitled to payment of lump sum, monthly pension by way of Programmed Withdrawal or Annuity for life from their RSA balance.

Lacuna in Pension Reform Act, 2014

Unfortunately, the law that made provisions for missing, critically ill and permanently disabled workers did not envisage that a retiree could suffer a similar if not worse fate.  The Pension Reform Act, 2014 does not consider retirees suffering from life-threatening physical and medical conditions.  Some of these group of retirees may be in need of foreign treatment, which they may not be able to pay for from their monthly or quarterly pension.
Some retirees are suffering from chronic diseases requiring specialised treatments (including medical trips abroad, chemotherapy, etc.) which they need to pay for in bulk to extend their lives.  Some retirees are suffering from terminal illness including leukemia with a very short time to live going by the medical advice and as such they need to sort their estates and share their wealth among their children and other beneficiaries while they are still alive.
These endangered groups of retirees cannot rely on monthly and quarterly pension.  They need all their life savings to be able to extend their lives or sort out their finances to meet some of their needs in death, including ensuring that their off-springs and family members do not kill themselves over their estate when they are gone. This may not apply to all retirees but it is essentially what some retirees need desperately to ensure that peace reigns in their families when they are not more.

Critical Illness
Wikipedia affirmed that Medical Practitioners see any illness as critical if it is “relating to, indicating, or being the stage of a disease at which an abrupt change for better or worse may be anticipated with reasonable certainty” or “it is being or relating to an illness or condition involving danger of death.”
The National Library of Medicine simply defined critical illness as “a disease or state in which death is possible or imminent” while the United Kingdom’s Financial Ombudsman defined critical illness as “a life-threatening condition, which is generally strictly defined.”
The Sun Life Financial Group in its publication “The Guide to Critical Illness Definition” said critical illness includes terminal illness, coma, paralysis, stroke, cerebral palsy, Alzheimer’s disease, Parkinson’s disease, heart attack, brain tumour, kidney failure, diabetes mellitus, cancer, prostate cancer, severe burns and cystic fibrosis.
Others are HIV/AIDS contracted by blood transfusion or during an operation, coronary artery by-pass surgery, heart valve replacement, major organ transplant, major organ failure on waiting list, malignant melanoma, coronary angioplasty aortic surgery, aplastic anaemia, motor neuron disease, multiple sclerosis, etc.
In insurance, critical illness policies usually provide for payment of a lump sum benefit if the policyholder is diagnosed as suffering from one or a number of these ailments.

Permanent Disability
Any injury that impairs the physical and/or mental ability of a person to performhis/her normal work or non-occupational activities supposedly for the remainderof his/her life is deemed to be permanent disability.
The Ballentine’s Law Dictionary defines permanent disability as one that “will remain with a person throughout his or her lifetime, or he or she will not recover, or that in all possibility, will continue indefinitely.”
According to Wikipedia, Total Permanent Disability (TPD) generally speaking, means that because of a sickness or injury, a person is unable to work in his own or any occupation for which he is suited by training, education or experience.
Permanent disability may include loss of two eyes, arms or legs; absence from work for six months due to an accident or illness, without expectation of returning to work, loss of limbs, blindness and deafness among others.

Need for Amendment of Pension Law
The greatest challenge facing retirees has to do with health.  This flows from old age, over work during their active years, untreated ailments when they were still young and agile and illnesses induced by sedentary lifestyles of retirees.

The selling point for any pension scheme is “maximising retirees’ comfort,” as such senior citizens suffering life threatening physical and medical conditionsshould be able to use their retirement savings to maximise their comfort andelongate their life spans.
Denying a man in coma or woman who has stroke access to his/her money whenhe/she needs it most because the law said so is the height of man’s inhumanity to man.  This is tantamount to sending the retiree to early grave because the thought of having money in a safe somewhere and being denied the use of the money to save one’s life will worsen the retiree’s health condition and make him die faster than he ordinarily would. Anything short of allow critically ill, terminally ill and permanently disabled retiree access to their money in full will amount to shortchanging them and killing them in cold blood.

During the making of the Pension Reform Act, 2014, life insurers kicked against the continued payment of group life insurance benefit into the RSA of a deceased worker.  They pushed for and got an amendment which enables them to pay the next of kin of deceased worker.  While this was going on, PFAs hid under the cover of PenCom and did nothing special to protect endangered retirees.
Meanwhile, the learning period for the Contributory Pension Scheme is now at a critical stage, as such government and pension stakeholders, particularly PFAs that have been passing the buck and referring these groups of retirees to PenCom instead of taking steps to address the issue; should as a matter of urgency sponsor a Bill in the National Assembly to amend relevant aspects of the Pension Reform Act, 2014 to ensure that retirees suffering from permanent disabilities, terminal and critical illnesses are paid the balance in their RSAs in fullto enable them elongate their life spans and or enjoy life while they are still alive.

• Iwuagwu is an Insurance and pension professional based in Abuja, Nigeria