PenCom should apply stricter measures in enforcing compliance with the provisions of the act
A major attraction in public service, despite its poor remuneration package, is the benefit of receiving pension after retirement. But over the years, the failure of government to meet the pension expectations of retirees has shattered the plans of many aside inducing economic trauma, which in some cases have led to fatalities. Indeed, many senior citizens who have no other sources of income after service had collapsed and died while on queues waiting for their pensions.
The situation with pensioners in most of the 36 states is particularly pathetic. A few weeks ago, hundreds of pensioners in Nasarawa trooped into the streets of Lafia, the state capital, to express their frustrations to the governor. Spokesman of the protesters, Alhaji Usman Ibrahim said the increasing number of deaths and sudden illnesses among members in the last two months was worrisome. According to him, “200 pensioners have died as a result of poverty, some of them are lying critically ill in the hospital unable to afford medications. Our members now depend on alms.”
The Pension Reforms Act of 2004 was designed to address the failures of the old scheme—the defined benefit scheme (DBS). In its place, the contributory pension scheme (CPS) was introduced wherein both the government and the workers themselves are to save up a given amount of their earnings towards building up an accumulated funds reserve which the worker can fall back on after retirement. It is noteworthy that the National Pension Commission (PenCom) has not only helped to grow the funds but has been very prudent in its management.
However, there are still issues that are yet to be resolved by the government regarding many retired civil servants. From the Federal Inland Revenue Service to security and customs personnel, staff of Nigeria Prisons Service, Nigeria Immigration Service to those of local government, the authorities offer little or no comfort. It is even more painful that the monthly stipend doled out to many of the aged and frail -looking men and women is about N2000 each, an amount that could hardly transport them back to their homes.
Complications in meeting up with the pension obligations had arisen fundamentally by the failure to link those in the old scheme (DBS) with those in the new scheme (CPS). But even after it seems to have been done, the federal and many state governments have failed severally in remitting deducted sums from workers’ salaries to the PFAs. The result is that neither government contribution nor workers’ deducted sums are credited to the accounts of the workers with the PFAs. This malaise is even more prevalent in the private sector where many companies do not remit their counterpart deductions to the PFAs as required by the Pension Act.
The provisions of the act had demanded that the government issues bonds in favour of retired workers, which will be redeemed to the PFAs who will credit same to the accounts of the individual staff. Therefore, the non-remittance of the deductions of staff is a clear breach of the provisions of the Pension Reforms Act and that perhaps explains why pension liabilities in the country today run into hundreds of billions of naira.
While we urge the federal and state governments to keep faith with their obligations to pensioners, we also call on the pension sector regulator, PenCom, to apply stricter measures in enforcing compliance with the provisions of the pension reforms act by the PFAs. It is only fair and just to allow pension to sooth the nerves of retired persons, especially after they have been faithful in making appropriate contributions to the scheme while in active service.