Pensions

Public and civil servants in Nigeria retire with fears of what the future holds for them after putting in 35 years of service. In recent times, gratuities are paid years after retirement, while the payment of  pensions are trailed by several challenges. In this interview, the Founder, Spiritual Heads and Grand Imam of Shafaudeen-in-Islam, Prof. Sabitu Olagoke says entitlements of retirees are too meager considering their years of service. Excerpts :
Are you comfortable with the challenges confronting the payment of pensions and gratuities to retirees in Nigeria?

The idea behind pension payments to retired employees is to ensure that the retired senior citizens continue to enjoy large sums of their approved savings in form of gratuity for him or her to be able to invest in some small scale ventures, while he or she simultaneously receives some reasonable sum in terms of percentages of what he or she used to receive previously for life to be comfortable towards the old age.

The Federal Republic of Nigeria pensions reform act 2004 was signed into law on Friday 25th, June 2004, after several reviews of the 1979 pensions reforms act which had to give way for a new contribution scheme for employees both in the public and private sectors in Nigeria, this was then after in June 2014 amended by the National Assembly whereby the contributory pensions scheme would involve the gradual retirement planning for any employee.

It made provisions for the deduction of the minimum of eight percent of the employee's monthly emolument, while the employer pays a minimum of 10 percent for the employee into the retirement savings account. The word minimum allows the dubious head of some institutions to defraud members of staff under them. For example, observations show the disparity in the pay packages of the members of staff in the same category of the same salary scale grade, receiving different amounts as take home from one institution to the other within the Federal Polytechnic system, not to talk of the big differences between such members of staff in the states and Federal Polytechnic system.

This led the Academic Staff Union of Polytechnics(ASUP) union leaders to compare not while some of them were silenced by the management bodies of their institutions for probing too much into what was regarded as an issue between management and the Federal Government.

The grey areas which need a categorical statement of fact from the Federal Government and managements of institutions is to clarify whether the individual contribution to the Pension Fund Administrators (PFA) is contributed from the source or by individual management of each of the institutions concerned.

Some polytechnic management made their members of staff believe that between 7.5 percent and 15 percent of their salaries go to the PFAs from the management of the institutions and that the government on behalf of the individual concerned staff paid between 7.5 percent and 15 percent.

Most retires were dumbfounded upon collecting their shares of the lump sum which they considered to be too meager to what their calculations over the years should be.

The unions and management of the institutions are always are loggerheads over the issue of transparency.

The challenges, therefore, confronting the new senior citizens are arrays of puzzles which the government needs to give urgent attention.

In Oyo State, pensioners became frustrated and some of them died in the process because of the challenges of embezzlement of the accrued pension funds.

Several retirees suffered from great delay over the years while some died in the process. There were equally some allegations that the government used to tamper with such funds to the level of no remittance to the PFAs.

Common setbacks on the issue of pension funds are 1)the delay of the government to pay pensioners and non-compliance by several universities. It is equally embarrassing to read on the pages of newspapers, the payment of pension funds into private accounts, fixed deposit accounts, and in unauthorized banks. From my personal experience, I retired in 2017 but received by the pension fund in 2019, my home was on the verge of disintegration due to my inability to fund domestic projects, if not for my wife and support from friends, one could have imagined what would have happened.

The question that should be on every person's lip is on the monitoring of the flow process involved in the payment of the pension funds via the government's side and the institutions' side, through a transparent and accountable mechanism to avoid unnecessary doubts from the clients of the PFAs, unnecessary delay in receiving the pension funds for the retirees to be able to use it meaningfully and beneficially in our economic environment that is not stable. For instance, any pensioner that may put his money into a fixed deposit will eventually suffer a setback through the Central Bank of Nigeria(CBN) directive that reviewed downward the accrued interests by almost two-thirds between January till date.

The pensions scheme from Act 2004 2014 and 2017, ought to have been very uniform to be respected by all institutions, universities, State Governments, and the Ministries, Departments, and Agencies. Proper orientation with clarity of purpose of the amount been deducted from the salaries of the staff and the corresponding mode of sourcing for it from the arrived salaries in the institutions, the Treasury Single Account directly should be clearly stated, so that the members of staff are not thrown into unnecessary darkness between the union leaders and their management.

Pension managers who embezzled pension funds must be prosecuted in accordance with the enabling law, this will assist in overcoming some of the challenges in pension funds administration-contributory and non-contributory.

There is a need to control the influx of ghost pensioners through an effective anti-fraud process and control of pension fraud using appropriate Information Communication Technology(ICT), biometric capturing machines, independent central data management authority, census of all informal employers and contributors, the establishment of the basic registration system.

Institutions found wanting on the issue of pensions funds scam must be exposed, while the personalities involved must be allowed to face the full wrath of the law.

Nigerian retirees who served their fatherland in the three tiers of government are now faced with the reality of the present time.

While in government service, certain amounts were deducted monthly from the source of their legitimate earnings and labelled contributory pension deductions.

However, in several states these pension deductions were not remitted to the Pension Fund Administrators(PFA) and has resulted in the pensioners’ inability to access money for their daily sustenance.

In addition accruals which are supposed to be paid by the Federal Government are not forthcoming.

With no respite in sight for the precarious situation, the pensioners lament that a sizable number of them have passed on to the world beyond, as a result of their inability to collect their entitlements.

In this interview, the Founder, Spiritual Head and Grand Imam of Shafaudeen-in-Islam Worldwide, Prof. Sabitu Olagoke opines that the Pension Fund Administrators only deceived the workers to register for the scheme, that has resulted in the the death of several of them after serving their fatherland all their lives.

What do you think can be done to salvage pension deductions of retirees by states which failed to remit same to the Pension Fund Administrators(PFA) ?

In 2004, the administration of Chief Olusegun Obasanjo introduced the contributory pension fund.

This was considered to be better than the old process for the payment of pensions and gratuity by government.

Those who joined government service during or before 2004, perfectly fell into this category. For those who had joined before 2004, the service of the Federal or State Governments, their pension funds, after retirement, had to go through the process of reconciliation.

However, some states failed to join at the time of its commencement, while some are also yet to join the scheme as of now.

For the states that are yet to join the new scheme, retirees have up till now been contending with a lot of difficulties, when it comes to getting their pensions as and when due, while thousands are still been owed their gratuities, which are very huge amounts.

In the process of unnecessary delay from government, many retirees have died because of lack of funds to take care of themselves, particularly, feeding and health condition.

If not for the delay in getting their rights and the fruits of their labor, they wouldn’t have encountered the Waterloo of untimely deaths.

These deaths are preventable.

As commendable as the new scheme is, workers prior to their retirement, face a great deal of discriminatory deductions from their employers, when they compare notes with their colleagues from sister places of work, depicting that even before retirement they’ve been putting up with the trauma of playing games with their salaries.

The institution pays 15 per cent of the workers’ salaries, while the Federal Government pays the remaining 15 per cent into the same purse of the workers for their future glorious exit from service or for a better retirement period.

Unfortunately, even while at work, workers have been very much confused about the truth regarding the myth surrounding the deduction process saga, but they were powerless to resolve issues, even through their so called unions.

The Pension Fund Administrators (PFAs) usually raise the hopes of the intending retirees, through various sensitization programmes, but this is within the limits of what their organizations can divulge as necessary information for the intending retirees.

In Nigeria life after retirement, usually snow balls into that of frustration, most especially when one experiences unnecessary delay due to lack of the much needed information that could show the stage of development of the processes, regarding the exact time, one’s accrued rights of entitlements would come and the possible amount both for your pension, for a lifetime savings and for gratuity for a lifetime venture and planning.

The fifth column in every bank is another headache for the retirees, when the issue of their safety and security is taken into consideration, when the amount eventually arrives.

The delay been experienced by several pensioners, has prompted members of the public to call for the need for transparency in the calculation of their final entitlements.

Government on it own must try as much as possible to work on the delays, to disabuse the minds of the public on the fact that politicians in power, usually disregard, the ethical principle of the no go area for the retirees pool of accrued substantial amount of funds, that is meant for their sustenance, after a meritorious service to their fatherland.