Lagos’ Pension Policy


The welfare of pensioners holds a prominent place in Lagos State administration, writes Tayo Ogunbiyi

Pension is the monetary benefit usually paid to retired employees or their survivors by private and public enterprises. The pension system was introduced into Nigeria by the colonial administration and the first legislative document on pension was the 1951 Pension Ordinance, retroactively dated back January 1, 1946. The contributory pension scheme was introduced in the Nigeria’s public sector in 1998 to address the limitation of the previous arrangement. In this scheme, both the employer and employee contribute a certain percentage monthly and were being managed by the Pension Commission.

The contributory pension scheme was improved upon in the Pension Reform Act 2004 and subsequently through the Pension Reform Act 2014.The latter addresses and defines the custodian of these funds and assets as well as the overall management. The 2014 Act empowers the Pension Commission (PenCom) – with the core mandate to ensure greater protection of pension fund assets- subject to the fiat of the Attorney General of the Federation, to institute criminal proceedings against employers who persistently fail to deduct and/or remit pension contributions of their employees within the stipulated time. This was not provided for by the 2004 Act.

Although adjudged as being better than the old method, the contributory pension scheme as stipulated in the Pension Reform Act 2004 was not without its challenges. These include the inability of the employers to honour their agreement by promptly remitting their own part of the fund, employment of unqualified staff to man the pension commission office, non- prosecution of indicted officials in the mismanagement of these funds as well as the laborious protocol involved before accessing these funds after retirement.

The arduous tasks that retirees undergo before collecting their hard-earned benefits usually send jitters down the spine of those still in active service. Invariably, the period of retirement, purportedly meant for resting and relaxation, becomes a time of stress and anguish for the retirees.

Often, some of them lose their lives in unavoidable circumstances. By far the most outrageous ill-treatment these old people get is the mismanagement of the pension funds. Recently, some officials in the federal civil service were arraigned for diverting the pension funds for their personal use. Although sensationally reported in the media, the case, like others of its kind, seems to be neither here nor there.

It is, however, gratifying to note that in the face of several inhuman treatments and needless hassles usually experienced by pensioners across the country, the Lagos State Government stands out in its attitude towards all issues relating to the welfare of pensioners in the state. It will be recalled that the state government domesticated the pension act and signed same into law on March 19, 2007 and it is instructive to stress that ever since that period the state government has never defaulted with regard to deducting its own part of the pension fund as at when due.

Indeed, the current administration in the state has made prompt payment of pension and gratuity one of its major obligations. Upon his inauguration, one of the earliest actions of the state governor, Mr. Akinwunmi Ambode, was the release of the sum of N11billion to pay off pension liabilities owed the mainstream retirees and the retirees in local government areas. Similarly, commencing from August 2015, the state government has developed plans to monthly disburse pension funds to ministries, departments, agencies and parastatals, including local government areas and the State Universal Basic Education Board (SUBEB). Also, between January and June, 2016, the state government has paid more than N41billion to over 9,000 retirees in line with her commitment to pay all pension arrears.

Without a doubt, the welfare of pensioners holds a prominent place in the plans of the current administration in the state. It is the conviction of the state government that one of the best means to ensure accountability, efficiency and productivity in the state public service is by taking proper care of the retirees. The underlining basis for this idea is that once those that are still actively engaged in the public service are aware that the system will take adequate care of them when they exit the service, they will definitely put in their best to move the state forward. It is, therefore, the firm conviction of the Lagos State Government that its timely intervention in pension issues will go a long way in not only ameliorating the sufferings of retirees in the state, but also in giving its current workforce the impetus to offer their very best in the service of the people.

Pensioners who have spent the most active parts of their lives to serve their nation must not be subjected to ridicule or treated with disdain in their old age. Any society that treats its pensioners with contempt does so at its own peril. Indeed, in other climes, the prosperity and stability of the society is partly sustained on the experience, expertise and wisdom of pensioners. As for those who flagrantly tamper with pensioners fund kept in their care on trust, the following words of Suzy Kassem, American philosopher and author are rather instructive: “Anyone who values profit over human life is very dangerous, inhuman and a bad specimen of human beings.”

Ogunbiyi is of the Ministry of Information & Strategy, Alausa, Lagos