One would think that after years of service to the government, retirees should have some pension to live on. It is probably too much to ask various government agencies to pay retirees a living wage considering the low level of economic activity in Nigeria but some level of pension to retirees should be a right after they put in required number of years of service.
The monthly ritual of frail individuals who could barely work straight without the aid of a stick, some so old they shake while in a queue for several hours or days waiting to collect their check is a sickening sight for any sane person. Some of these pensioners have endured abuses and unconducive work environment while in service and now have to put up with months of waiting for their paltry gratuity. The worst part is that the pension backlog runs into months and years without any sense of urgency by the government officials who are suppose to know better.
Even in the year 2012, the story has not changed much. Nigerian media have been awash with news of many of pensioners collapsing in various parts of the country, some dying while standing in queue to collect their meager stipends. The story has been the same from the military to the police to the civil servants.
The unending nightmare of fraud perpetuated on pension accounts is inflicting untold hardship and pains to retirees. They read on daily newspapers how their entitlements are embezzled by government officials who are suppose to manage their pension.
George Oji writes that the public hearing conducted by the senate joint Committees on Establishment, Public Service, Local and State Governments to investigate the administration of pension funds in the country turned out to reveal astonishing details of how public servants enriched themselves with funds meant for the nation’s senior citizens.
In response to the outcry of pensioners, George Oji stated that senator Heineken Lokpobiri (Bayelsa West) in December last years sponsored a motion in which the plight of pensioners in Nigeria were extensively discussed and debated. The motion afforded the senators opportunity to freely expose the noticeable ills inherent in the administration of pension matters in the country. The public hearing, which had been conducted in the six geo-political zones of the country, was rounded off at the National Assembly, Abuja.
Senate president, David Mark, who declared the public hearing open remarked that “if your wealth is from people’s pensions then that is blood money. It is a blood money because you cannot take away the sweat, the entitlements of an old man or an old woman who is looking up just to that little appreciation from his country and believe that he will live in peace. You cannot because the prayers of those old men at home will not only follow you, it will also follow your children and children’s children.”
According to Mark “ Pensioners are pensioners because they have served their nation faithfully and on retirement must become a part of that vulnerable population that must be properly taken care of.” Well said senator Mark.
Nigerian pension system is fraught with problems. Most pension fund are underfunded or simply not funded at all. Most have unsustainable outstanding pension liabilities with weak and inefficient pension administration. Most workers in the private sectors are not covered by any form of retirement benefits arrangements.
To be sure, Nigerian government enacted Pension Reform act of 2004 which mandates establishment of contributory pension fund for private and government employees which should be used for payment of retirement benefits to all employees. Subject to section 8 of this act, the new pension system shall apply to all employees in the public service of the federation and Federal Capital Territory. In the case of the private sector, the act mandates organizations with 5 employees or more to establish pension fund for those employees. The new pension reform also requires pension funds to be privately managed by licensed pension Fund Administrators (PFAs). To ensure credibility and discourage frivolous application, pension fund companies must be a limited liability company and must provide paid up share capital of 150,000,000 Naira and demonstrate professional capacity to manage pension funds retirement benefits.
Reform objectives should include the following:
- Curtailment or elimination of high level of corruption in pension administration.
- Ensure that every worker receives his retirement benefits as and when due. Pensioner should not have to wait for more than one month after retirement to receive their first pay check.
- Establishment of uniform rules, regulations and standards for administration of pension matters.
- Empower the workers to save in order to cater for their livelihood during old age.
- Secure compliance and promote wider coverage.
- Establishment of a system similar to 401K in United States which requires private sector businesses to establish and match pension contribution for their employees. Employees should be able to take their contribution and matching fund if they change job.
High level of corruption in Nigeria continues to be the Elephant in the room. Corruption is so widespread in Nigeria and constitute a nearly insurmountable obstacle to any reform effort. There are numerous incidences of pension fund embezzlement in Nigeria Newspapers. Corruption must be brought under control for pension reform to yield meaningful result.