By Otaru Oshiokeh, Abuja.
Amid concerns over economic hardship across the country, stakeholders on pension matters have criticised the Federal Government for not releasing accrued pension funds to Pension Fund Administrators (PFAs) legally empowered to disburse pension payments to retired civil servants when due.
Findings by ThisNigeria reveal that the Federal Government has so far paid only N13.89bn accrued pension to PFAs since 2022 to date, while it has continued to delay outstanding payments that have denied retirees from getting their pensions.
A retired officer from the Ministry of Industry Trade and Investment, Mr Ofonmbuk Sunday, told ThisNigeria that after retiring from the service in June 2023 and completing all necessary formalities, he has not received his gratuity.
“My PFA is Stanbic IBTC, asked us to wait until we are called, but as I speak, I am treating arthritis and unable to buy drugs. I am just appealing to those concerned to pay my entitlement to enable me to buy drugs, I am dying. I do not even have enough to eat with my family, and can no longer pay school fees for my kids.”
Another civil servant who retired in 2020, Mr Ben Okonofua, said he received his pension for a few months but recently got complaints from his PFA that they were finding it difficult to get his accrued pension from the Federal Government, a situation that has put him in a tight corner.
Okonofua said, “I can’t understand the country any longer, why has the government refused to pay our accrued pension that we contributed to the PFAs, this is very bad. How can I serve my country for over 30 years and no longer have access to my contributory pension, they should please have mercy on us. I am already old, I only rely on my pension now to survive.”
These are the gory stories that have permeated into the rank and file of retired civil servants who are finding it difficult to have access to their gratuity or pensions after several years of service to fatherland.
While Nigeria’s Pension Managers also known as Pension Fund Administration [PFAs] have begun to face undue pressure from retirees following the Federal Government’s inability to pay accrued pension rights of newly retired employees, the plights of employees who retired in 2022 and 2023 who are yet to access their pensions, have become worrisome.
ThisNigeria gathered that the majority of the affected retirees who are putting pressure on their PFAs to access funds are being turned down because their accrued rights from the Federal Government as their employer had yet to be paid.
Accrued rights refer to the pension benefits that employees of the Federal Government’s treasury Ministries, Departments, and Agencies [MDAs] are entitled to, based on their service years before the commencement of the Contributory Pension Scheme [CPS] in 2024
A staff of PENCOM who did not want his name mentioned told This Nigeria that the commission is already computing the outstanding accrued pension funds that are yet to be paid to authorize PFAs from 2023 to date.
According to the source, “We are on it and we shall put details on our website as soon as we are done.
Stakeholders however, said that no form of excuse warrants the ugly situation given the facts that data from PENCOM shows Nigeria’s pension assets rose to N19.531trn for the period ended 31st January 2024 compared to the N18.356trn reported in December 2023 representing 6.40 per cent,
Managing Director/CEO of the Nigeria University Pension Management Company Limited (NUPEMCO), Ugwu Oluwakemi, said recently in an interview with Journalists that PFAs are unable to compute and pay retirement benefits immediately after retirement because of unpaid accrued rights of affected employees.
He stressed, “Despite the balances in the Retirement Savings Account (RSA) of retirees, the PFAs are unable to pay because of Section 2, 3 of the Revised Regulation on the Administration of Retirement terminal benefits.”
The regulation, she noted, states that the components of an RSA at retirement shall include accrued pension rights or pre-act benefits [if any] for employees who were in employment before the commencement of the Contributory Pension Scheme (CPS).
She noted that employer/employee pension contributors, returns on investment, and the fixed portion of voluntary contributions (if any) must also be included.
Oluwakemi explained, “This is giving bad publicity to the industry since releases are not fully aware of Section 2, 3. They assume the PFAs intentionally do not want to pay them.”
According to her, the delay is leading to a rise in the number of untimely and preventable deaths, stating that due to the waiting period, some retirees, who would have had access to health care are deprived of it and they die early.
“This is very obvious in the University system, where Professors retire at 70 years, life expectancy in Nigeria is less than 70 years, which means they have cheated death, yet, they wait for an average of one year before they access their funds, this is very pathetic,” she added.
In her suggestion, the NUPEMCO Chief Executive Officer recommended that the government should establish a dedicated pension reserve fund especially, for accrued rights payments, “this fund should be insulated from other government budgetary constraints and competing priorities’’
She said there is a need to identify sustainable and diverse funding sources for the reserved fund such as a portion of tax revenues, investment income, or special levies.
She further suggested the introduction of special levies or taxes dedicated to pension funding and the passage of legislation that mandates regular contributions to the pension reserve fund.
The legislation, she said, must outline clear rules for pension funds management and disbursement.
She stressed the need for the implementation of multi-year budgeting practices to better forecast and allocate funds for pension obligations over several fiscal years as well as ensure that budget allocations for pension payments are ring-fenced.
Speaking at a recent retreat organized for the lawmakers by the Pension Fund Operators Association of Nigeria, a member of the House of Representatives on pension, Olumide Lateef said, “We have to make sure that issues around pension’s accrued rights are received to ensure the success of the scheme.
“What we must fight for at the National Assembly this time is that when people retire, they have access to their pensions,” he said.
Lateef also advocated for an amendment to the existing regulations to allow for more flexible and efficient consolidation processes stressing, “This can include setting specific timelines for each stage of the consolidation process to ensure accountability.
“Establish a joint task force comprising representatives from PFAs, PenCom, and relevant government agencies to monitor and resolve issues related to RSA consolidation and the timely disbursement of retirement benefits.”
Also, float a five–year bond specifically to cater for the employees who would retire in five years.
Similarly, a United States-based pension expert, Mathew Ike noted that there is a need to insulate the entire pension industry from government excesses through legislation.
