Urgency of Bailout for FG Pensioners Gains Momentum

The plight of Federal Government pensioners, though not new, gained attention of recent following two quick resolutions by the Senate and the House of Representatives asking the Executive to provide bailouts or adequate appropriation in the 2017 Budget to settle the FG pension liabilities once for all, to give respite to retirees. The FG should capitalize on the legislative impetus, writes Olaoluwakitan Babatunde

The essence of pension is to secure the future livelihood of the worker and also to pool investible funds to oil the wheels of the economy, like the provision of critical infrastructures.

Unfortunately, the Nigerian pension system was one big pile of mess charactised by humongous pension liabilities and death by installments for Nigerian retirees due to corruption. However, the extensive pension reform embodied in the Pension Reform Act (PRA) 2004, now PRA 2014 changed the story for good.

 Among other giant leaps, the 2014 Act amended the Contributory Pension Scheme (CPS) for the employer and the employee to now contribute 10 percent and 8 percent, respectively (although the 7.5 percent each by the employer and employee is still in force). The CPS moved Nigeria away from the unrealistic Defined Benefits Scheme (DBS), built on the false premise that the government/employer would always pay mouth-watering gratuity and pension to retired workers for the rest of their lives.

 Pressing Challenges

 Despite the remarkable progress, it is clear that there are glaring challenges facing both retirees under the old pension scheme (DBS) and the new Scheme (CPS).

 The challenge of the old scheme is the failure of successive federal administrations since 2004 to clear Federal Government’s (FG) liabilities to pensioners. This was due largely to poor funding and corruption. To address this, the PRA 2014 properly established the Pension Transitional Arrangement Department (PTAD) to cut off corrupt third parties, thus making it possible for DBS pensioners to get their benefits paid directly into their personal accounts.

 For the CPS, the major challenge of the otherwise flawless scheme, according to PenCom, is non-payment of retirement benefits of Federal Government employees, due to insufficient appropriation and late release of appropriated funds for payment of accrued pension rights.

 PenCom made this known at the 2017 budget defence organised by the National Assembly Joint Committee on Appropriation in January this year.

 For instance, although it requested for N93.067,441, 000.00 in the 2014 budget based on 11,010 verified and enrolled FG employees scheduled to retire in that year and for deceased employees, PenCom said only N30,582,553,824.00 was approved in the budget. That translated to a whooping 62,484,887,175.00 deficit.

Again, while FG’s pension liabilities for the year 2015 was put at N98,705,155,450.00 for 13,799 retirees and deceased employees, only the sum of N60,251,158,884.00 was appropriated in the 2015 Budget, thus resulting in another deficit of N38,453,996,566.00. 

 “For the year 2016 FGN Budget Appropriation Bill, the Commission requested for N91,914,899,000.00 based on 16,267 verified and enrolled FGN employees scheduled to retire within the year as well as estimates for deceased employees. However, only a request for N50,195,808,918.00 was presented to the National Assembly by the Budget Office, thereby resulting inN41,719,090,082.00 shortfall. Even at that, out of the approved sum ofN50,195,808,918.00, only N18,823,428,342.00 was released”, the Director General (DG) of PenCom, Mrs. Chinelo Anohu-Amazu, explained. This meant that mandates for seven and half months, totaling N31,372,380,576.00, were not cash-backed and released by the Office of the Accountant General of the Federation. For 2017, PenCom told the National Assembly it would require a total of N113, 023,255,000.00 to settle pension.

Endangered Species

 Deploring their fates when they stormed the Office of the Speaker of the House of Representatives, Hon. Yakubu Dogara under the umbrella of the Nigeria Union of Pensions (NUP), the senior citizens said “Pensioners have become endangered species”.

 “This is a very important reason why government needs to ensure that pensioners are paid as at when due, especially considering the fact that these old people have used their youthful days to serve this country meritoriously. Now is the payback time, the country should not fail them”, he added.

 With palpable grief running down the ridges of wrinkles made by both age and hardship on his face, the National President of the NUP, Dr. Abel Afolayan, told Mr. Speaker that NUP has ”empirical proofs to show that the 2017 budget has not provided sufficient funds for payments of pensions in the two pension schemes (CPS and DBS)”.

 They detailed the total liabilities of the four Pension Departments under the DBS as follows: Civil Service Pensions- N55,337,900.666.56; Parastatals Pensions- 110,843,381,505.92; Police Pensions- N6,799,175,159.10; and Customs, Immigration and Prisons Pension- N1,520,886,345.30, hence a total of N174,501,343,676.88.

 They also put the 2017 social benefits liabilities under the old scheme at N302,405,338,862.00, but lamented that the executive only submitted a request of N109,123,179,369.00 to the National Assembly in the 2017 Appropriation Bill, leaving a staggering deficit of N193,282,159,493.00.

 NUP grieved that rather than N113,023,000.00, only an approval for the sum of N50,195,808,918.00 was sought by the Executive arm in the 2017 Appropriation Bill for defraying pension liabilities of the FG under the CPS, thus leaving a whooping deficit of N62,827,446,082.00.

 The pensioners emphasised that such cuts were not merely slash of figures, but indeed lives. NUP prayed the Speaker to intervene to ensure sufficient funds in the 2017 Appropriation Bill to offset outstanding pension liabilities, as “our members are dying daily in pain, penury, frustration, and abject poverty without enjoying the fruits of their labour”.

  The Speaker admitted, “Nigeria has failed pensioners”, adding, “I will accept the blame on behalf of the government and apologise to pensioners”.  A visibly bitter Speaker has made a pertinent point, which is that corruption and suffering of pensioners could not go hand-in-hand.

 According to him, “These are some of the things that make corruption thrive in the society, where people who have been entrusted with public funds, believing that by the time you leave office, you will be forgotten, decide to say ‘let me see if I can help myself and wait for the rainy days.

 “We will invite all those concerned with this payment of pensioners to the House to take the centre stage. We will yield the floor to them to tell Nigerians what they have done to ensure that we get out of this mess. Whether it is through the instrument of the budget or by intervention from service-wide vote or however”

NASS Weighs in

 The National Assembly, of recent, has left no one in doubt that pensioners’ welfare has become a matter of urgent national importance.

 Aware that the matter at hand is beyond apologies, the Speaker and House of Representatives have taken practical steps by resolving to invite all the heads of all government institutions involved with pension- Ministry of Budget and National Planning, ministry of Finance, PTAD, and PenCom – to appear before the House on Thursday, April 6, 2017.

 It would also be recalled that the House had on March 22, 2017, resolved to “mandate the Speaker and leadership of the House to liaise with the Senate leadership, to get the buy-in and cooperation of the Executive in general and Mr. President in particular to provide the required funds in the 2017 Appropriation Bill, or provide emergency bailout funds to redeem all FG pension liabilities”.

 It further mandated the House Committee on Appropriation to liaise with its Senate counterpart to include the required funds for the payment of pension arrears under the CPS and DBS of the FG in the 2017 Budget estimates.

 The resolutions were sequel to a motion brought by a member of the House Committee on Pension, Hon. Toby Okechukwu (Aninri, Awgu, and Oji River Federal Constituency).

 Hon. Okechukwu had observed that there was no way the country could successfully fight corruption when “pensioners are wallowing in penury, sickness, hopelessness, and full of regrets for serving their fatherland diligently only to be abandoned by government upon retirement”.

 Senate Pushes for bailout

 Similarly, the Senate had recently passed a resolution asking the Executive to immediately clear FG’s pension liabilities following a Motion by Senator Emmanuel Paulker (PDP, Bayelsa Central) entitled: “The Untold Hardship of Pensioners Occasioned by FG’s Failure to Contribute its Statutory Share to the Pension Redemption Fund”.

 He maintained that if the FG could release bailout funds to pay outstanding workers’ salaries in the states, in another tier of government, similar gesture should be employed for the payment of pension arrears, “which is the direct primary responsibility of the Federal Government.”

He urged the National Assembly “to liaise with Mr. President to intervene in the current pension scheme financial challenges by providing a bailout fund to redeem all FG pension indebtedness, saying the Senate was concerned that pensioners under the CPS, who retired since 2015, had not received their pensions due to the failure of the FG to contribute its statutory share of 5 per cent to the Pension Redemption Fund”. 

The Ball in the President’s Court

 Meanwhile, pension industry stakeholders and the civil society appear to be aligned with the National Assembly on this. 

 The Centre for Humanity (C4H), said President Buhari would write his name on gold if he clears the pension arrears of FG’s pensioners.

 Spokesperson of C4H, Mrs. Ngozi Ogbu said: “Ordinarily, the president should be bothering whether the legislature would approve his bailouts or endorse additions in the 2017 Appropriation to clear the liabilities.

 “By demanding that the President clears the pension liabilities, the NASS has made it easy. So, I believe, President Buhari being a listening leader and a pensioner himself would seize the opportunity to do the right thing. The ball is in his court.”

 Will President Buhari take the bull by the horn or would the pensioners continue to pine away in anguish and penury? Only a few weeks ahead will tell.