Revamping the Pension Scheme in Niger

Laleye Dipo writes that though the bold steps taken by the Niger State government to revamp the pension fund scheme uncovered some high level scam, some measure of reforms have been put in place

The Pension Fund administration in Niger State was once in contention with government and all the stakeholders. To resolve the issue and revamp the scheme, the state government set up a panel to look into the pension fund administration. One of the major fundings was the confirmation that N5.778 billion was missing from the fund as against N6 billion initially thought to have disappeared.

The disappearance of the money was alleged to have taken place between 2012 and 2015 when the last administration was in office.

Findings

Item iii of the committee’s findings states that “the embezzlement and mismanagement of Pension Funds by officials during the Pension Administration in the Ministry for Local Government and SUBEB was occasioned by non- remittance of fund and resulting to zero balance in the Retirement Savings Accounts of Staff of local Government Councils and SUBEB amounting to N5.97Billion”.

Another finding by the committee was that 15 persons, some of them politicians and civil servants with some of them no longer in service, were found to be culpable in the alleged “stealing” of the N5.778billion.

The report however exonerated the Pension Board of any involvement in the diversion of the money since the “missing amount did not get into the account of the board”.

The committee was headed by the state Deputy Governor, Alhaji Ahmed Mohammed Ketso with the Permanent Secretary Cabinet and Security office of the Main Secretary while three other assistant secretaries drawn from strategic ministries and departments also on the panel. Organised labour had its representative on the committee just as the Pension Board, the Nigerian Union of Pensioners, as well as the Nigeria Union of Local Government Employees.

Recommendation
What has been the cheering news to members of the orgainsed labour, which submitted a position paper to the panel during its almost one year of sitting, is the recommendation by the committee that everything should be done to recover the missing money.

More cheering is the decision of the government to avail itself of the expertise of the Economic and Financial Crimes Commission (EFCC) in the recovery of the missing money.

In fact, it is now public knowledge that the operatives of the Department of State Security Service (DDS) immediately the report was made public, sought for and got a copy of the document indicating that they have stepped into the matter.

Whether the government will have the political will to go after those that stole the public money or not is another issue waiting to be seen but the Director General of the Pension Board Alhaji Usman Tinau Ahmed is emphatic that “government will recover the money to the last kobo” insisting that ” government will not take responsibility for this money, those involved must pay back the money, it is the peoples money”.

Resumption of Contributory Pension Scheme
One other problem the report has been able to address, which also received the blessing of the organised labour, is the resumption of the Contributory Pension Scheme (CPS) for certain category of workers in the state civil service and in the local governments as well as those engaged by the State Universal Basic Education Board (SUBEB).

The scheme suffered setback way back in 2015 when Labour raised serious objections to its implementation especially as it concerned those workers that will be enrolled on the scheme and those that will remain on the Old Pension Scheme.

The disagreement between Labour and government dragged on till a truce was now reached with the panel set up to look into the matter and all stakeholders agreeing that workers that had been in service from 1992 downwards should remain in the Old Pension scheme while those employed from 1993 to date will be enrolled in the new Contributory Pension Scheme. It should also be understood that while the CPS was stopped, there was no contribution either by the workers or the government.

Another reason why the CPS implementation first hit the rocks was ” lack of political will on the implementation of the CPS by the previous administration which accounted for poor administration of pension remittances” and “inability and in most cases delay by Pension Desk Officers in Local Government Councils to submit files of returns to the Pension Board for capturing”.

In agreeing to the reintroduction of the CPS therefore, Labour said : “The Organised Labour in Niger state is committed to the resumption of the 7.5 per cent Contributory Pension Scheme for Workers in both the state and local government area levels effective March 1, 2020. This is without prejudice to the earlier communicated resolve that resumption in deductions shall be subject to the implementation of the contents of the agreement reached between organised Labour and Niger State government on February 8, 2020.

According to the letter jointly signed by the state NLC Chairman Comrade Yakubu Garba and his counterpart in the TUC Comrade Yunusa D Tanimu : ” The scheme must be operated in strict compliance with the provisions of the New Niger State Pension Act”.
The new act was passed by the state house of assembly and assented to by Governor Abubakar Sani Bello on September 6, 2017.

In order to key into the stand of labour and ensure due diligence, it was not possible for the CPS implementation to recommence in March as suggested by Labour. However, earlier, Ahmed said everything has been put in place and all loopholes plugged the CPS will commence by June this year.

He said the Pension Funds Administrators (PFAs) have been selected for different segments of the contribution with Premium Pensions assigned to workers in the state civil service, Trust Funds for those in the employment of the local governments and PAN for those engaged by the State Universal Basic Education Board.

In addition, Ahmed said different administrators were also engaged for the five per cent deduction. Veritas is assigned to the state, IEI for local governments.

Fund Management Committee
As a departure from the past, a Fund Management Committee has been set up with prominent government officials including the Deputy Governor, the Secretary to the State Government Commissioner for Finance among others as members.

Also in line with the directive of PENCON, a “Service Level Agreement” SLA has been set up to properly monitor all issues related to the management of the fund. It is learnt that the 7.5 per cent contribution by workers started when the amount involved for June and July was deducted from worker’s salaries in the month of July.

Hitches
However some workers kicked against the deduction because it has not been backed by the relevant “Circular” from the office of the Head of Service. The argument of the workers is that if there is no circular similar events that occurred in the past could still resurface and workers may not have any document to fall back on which might result to loss on the party of the contributors.

One major problem the implementation of the CPS is already facing is lack of current data of the numerical strength of staff in the local governments despite repeated requests for this information by the Pension Board.

Gains

This notwithstanding, the exercise has also taken off for workers in the local governments while the appropriate and accurate data are expected.
At the moment the state is said to be paying over N488m as monthly pension to retirees of the state civil service and N287m to those retirees from the local governments.

The reforms already carried out though may not be totally acceptable to all the stakeholders, it is believed this will bring sanity to the entire pension administration in the state unlike what obtained in the past.