‘In Two Years,  Niger State Lost N900 Million’

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Laleye Dipo interacts with Alhaji Tinau Mohammed Usman, superintendent of Pension Administration in Niger State on how the administration of Governor Abubakar Sani Bello has corrected anomalies in the system

What is the state of pension administration in Niger state?

I want to start by giving a brief, particularly on when we came to power what we met on ground and what
we have done so far before giving you the number of people on the
payroll which we call pension statutory. It is different from gratuity because it has other variables, retirement benefits, death benefits. Other pension issues that relate to gratuity are different from
the pension statutory. People mix them up.
We came on board on March 18, 2016, part time members were also
appointed, we came with a mandate to re-organize, reform and see that
we revitalize the operations of pension matters in Niger State with the single aim of having an efficient service delivery. What we did first as a management is to have a road map. Infact, the takeover note we have from the previous management is nothing to write home about.
The road map among others things looked at what we have even the challenges we met on ground. One, there was no data base, and any where you are dealing with numbers be it human,
financial or materials you should have a data base so that you can build on what you have.  We have to synergise the departments to function also effectively. We met a different local government service unit, and a different State Pension Unit, whereas, the law provides
that there should be a unitary pension administration, that is, one system
that will take care of both state and local government pension administration with a Director General as head. The operation then was even a misnomer because when you have two permanent secretaries heading two different units and then a permanent secretary will be
reporting to another permanent secretary of equal status. You can
understand the problem they will have with such arrangements. We saw that files were apparently missing, pensioners will come and stayed
for very long time. To trace the file was a serious problem in both the state and local governments, but the local
Government was much more problematic than the state so we had to look at that. In particular, we saw one operational lapse in the local
government. Prior to our coming any pensioner’s file that is submitted
to the board when moving it to local government, after computation they will move one, it is expected that you have two files, Personal file and official file being together, now we had to
stop that because that allowed for a lot of window to have fraud. When you take one file and it is returned after 6 – 7 months or one year, they will now represent it. Whats to make sure that any
file that comes into the board is captured because we are now IT driven. An IT company was provided at N18m, so we have IT tools including server, so any file that comes into the board cannot be
missing and if it missed, it means the permanent member in charge of general administration will be called to tell us where the file is. I am proud to say that anybody who goes into the Pension
Board with a problem will be asked for his/her RV number and the problem will be solved.
In the road map we had to look at how we can reduce the suffering of pensioners so we proposed in terms of
payment, whatever payment we want to make we have to batch them because of paucity of funds, it gives a window that everybody will be paid as at when due and according to the compliments of the resources available.
What is the liability you met and how did you liquidate it?
The liability was about N4 billion on the DBS on the CPS, those on ground we had over N4 billion too. So if you combine that at that material time it was over N9 billion.  We now tried to find out the genuineness of the files we inherited. One singular variable that came to our attention then was balance of death gratuity and another one was supplementary list of retirement benefits.  The balance of death gratuity simply is that someone might have collected his retirement benefit and has
started enjoying monthly pension, then suddenly one dies.  The law of
pension says he has to enjoy that monthly pension for five years.  If he
enjoys the benefit for two months and he dies that means the government
has to pay him four years 10 months as balance of death gratuity.  Now
we went through the books and discovered that alone especially in the
local government constituted about 70 percent of the variables that were put
as liabilities because over N1.6 billion or thereabout was said to be outstanding.
The balance of death that was presented to us was from 2002 – 2012.
One thing that we saw there that surprised us was that it started slowly but then it was going at an increasing rate, It went to a point and started declining.  If you are a statistician like myself it will give you cause for concern.  We found out that in 2002 they said
only 10 people died, but in 2009 it spiraled to 399 in one year and
the value attached to it was N410 million. In 2010 it increased to 492 or
thereabout with over N490 million. When you add the two you see that in
two years, Niger State must have lost 1000 retirees and also close to
N900 million.  In terms of value, any statistician will tell you that there is a mis-match, even if you take the mean, you will know that there is a problem.  Based on that we said we are not paying. We said if any body’s next of kin is around for balance of death gratuity he should show up for collection.  Till today, nobody came out of over 1000 plus people they claimed to have died.  That is effectively deducted from the liability
we saw on ground.  That is for the local government. When I saw the
number of files for the supplementary list and I asked them, they said about 86 or thereabout but the amount they said was N79m, I said add it to balance of death gratuity, that too I have not seen anybody that has come to collect.  This information I am giving you I have shared it with the topmost leader we have in the state.  I told him Your
Excellency, if we have these number of people dying in two years without
any United Nations Agency saying there is an epidemic in Niger State, then I will advice that we close the Pension Board because there is no need since people are dying at that rate so why do we have to have the Pension Board again.
For the state from N1.2 billion,  it was reduced to N745m and that was
the  famous N2.06 billion  you heard when we came in.
 The N2.06 billion was approved by Mr. Governor out of the N4 billion.  So we
have already made a saving of over N2 billion, even though you will not see it in cash but it would have been cash backed, so the Niger State Government would have lost a lot of money.
How were you able to pay the Pensioners?

We raised a memo to Mr. Governor and he approved based on what we have in the road map. We categorized the liabilities, any liability that is not above N50m that local government qualifies to be paid, in that alone we had 14 Local Governments fortunately we paid those 14
Local Governments.  We now started raising it to N80m to N100m.  We
left the big ones Chanchaga, Agaie, Lavun, Shiroro, Bida.  So we paid
with the N2.06 billion liabilities we met on ground under the DBS. I
want the public to note that these liabilities are not the liabilities
of Alhaji Abubakar Sani Bello’s government but because of the fact
that government is a continuum he had to source for the funds and pay
it. That was why we had a bit of peace after a lot of hullabaloo on
the new pension scheme, before the Law was amended.
What of the CPS?
 

 I told you we met over 4000 pensioners and over N4.2 billion liability. There was a lot of pressure that we had to find a way to get them settled. So we adopted the same system, we batched the
pensioners. So, to start with we paid 543 of them which was N1.4 billion. From there came the Law in 2017 as amended and assented to by Mr. Governor on the 6th of September, 2017. That Law gave a period that if your 1st appointment is on or before
31st December 1992 you move into the old Pension Scheme. What this
meant is that we have to re-calculate the entitlements of all those
people on ground so we successfully recomputed them and came up with a
total liability of N22.6billion because it was not only retirement
benefits, we have the arrears, we have the death gratuities, we also
had the arrears of the monthly pensions because if somebody has
retired for 10 years and he has not collected anything from the PFA, nor
has the government paid him any kobo so we have to pay his
entitlements from the day of his retirement. We reverted over 6280
people to the old pension scheme.

We also agreed on the number that will be taken to the two audit
departments. We started with 200 each for each of the departments.  So
we started by paying those who have not collected anything. Till this moment, anybody whose file has been processed and brought to the Pension Board has been paid.

How many pensioners do you have now?
For now we have about 16,000 pensioners, state 8703 Local

Government 7046 as at July 2019.
They are the pensioners under the payroll of the government. The
figure has continued to rise.

Why?
It is obvious that it will continue to increase until when we
get to a period of time when all these files that went out are
returned and again don’t forget that people are retiring on daily
basis, but the Law really created 70% of the liability because of the
large number of people that were moved to the old Pension Scheme.
From that time 2017 to now government has paid close to N10billion on
monthly pension after the review of the Law.

Why?

 Before the review of the law the monthly pension for state was in the range of N121m to 125m but now it has astronomically grown to N417m by the last count because of the law. For local governments prior to that September it was N60 or 63m today we are talking of
about N222m so summarily the state is paying N800m monthly including
the arrears.

Do you think the government can sustain this?

That is why we have to do something about it. Because on the average we have about 30 files of people retiring coming to the board daily.
But the labour still complains, they ask why is the government paying only30%. retirement benefit
We have to pay as per the resources we have because there are other contending issues for the government. We pay
30% to people who are alive as retirement benefit because they have
other advantages, the other advantages include that he who is alive has his monthly pension being paid, he also has arrears to collect.
Those we have paid so far we saw that the arrears being paid to them
outweighs their pension, three, is that aside from the 30% we have
retirement benefits, (RB) Arrears of monthly pension and monthly
pension. He who is alive has to take his monthly pension every month
when we are paying 30%we will pay him, we will also pay him arrears.

Before it collapses what is the way out?

We have suggested a number of ways particularly we think there should be biometric. The resumption of the CPS will help greatly to the reduction of the negative impact it will have. CPS has come to stay, now we should be thankful to the federal government because all
states going for bonds, one of the requirement is that they must have
resumed CPS, if they have not done so before they should join, because
pension asset in Nigeria is N10 trillion so it is just waiting for someone to say I want it and they will say come and take, so the PFAS want the status to ascribe to bonds, floating bonds. So they will
subscribe to it. I will advise that any state subscribing to bonds should emphasize infrastructural development, 30% to pension board.
Secondly, government should also look at other sources for example the 1GR, they should boost their IGR.
Thirdly we must have another biometric, I am really calling for that because sometimes I get afraid with the turnover of files I see from local governments, the information we are receiving from local government is scaring. The biometric must be carried out because even for the CPS to function effectively in Niger state there must be that biometric. If this is done I believe it will reduce the impact of the problem that will come.

What is the position of the PFAs in all this?


We have met them with officials of Pencom. They are guiding us on the implementation policy. The PFAs are up and doing, infact as we talk now we have paid, that is, refund 11,183 beneficiaries amount N4.10bn from the PFAs so you
will see that the state government will have almost equal of this.

Some permanent secretaries that retired complained that they have
not been paid their entitlement why is this so?

Evey permanent secretary that has retired in Niger State in this administration has been paid.

So you are not owing any permanent secretary?

They have all been paid. Now they have the right to be talking that they need more money. When the Auditor General sent in a figure we wrote to Mr. Governor he approved and we paid them the difference.
Now you can’t eat your cake and have it. For example you worked for
only 20 years how do you expect that you should be paid 35 years in service
because you became a permanent secretary, when the law does not permit
that? I advised them that since this is what they want, they should
write to the government for approval

Pensioners recently occupied Benue State Government house for
days demanding their pension, what advice do you have for your pension
Board colleagues and the governments to stop this?

It is a pity. It is not good for the system for a senior citizen to retire and not given that monthly pension. My advice is
that, yes, the resources coming in is not much but even the President said pension should be first line charge so let them try their possible best to see that what they have for the monthly pension goes round. Let them copy the system of Niger State we are not Lagos, we
are not Rivers, yet we are paying. Pay 30% to the pensioners he will be happy and do something with the money. I am advising the governor to copy Governor Sani Bello because he has done well in the area of payment of pensions and gratuity.

How do you think you can stop this complain by people going round
that they have not received their Pension?

This is what I did last year because such complains have reached Mr. Governor.  We agreed with Mr. Governor that we should publish the names of those that have been paid and we published it.
When we published it everyone kept quiet.  We did so even the second
time for the 7.5%.  For the benefit of the public and the government itself we shall continue to publish it.  Now we have a lot of numbers to even publish, we will publish the number of people and the amount, we don’t hide the amount.