THE WOES OF PENSIONERS
The regulator should enforce the provisions of the law
The Contributory Pension Scheme (CPS) was adopted in 2004 to end protracted delays in payment of pension benefits to retirees. But 20 years after, many pensioners in the country are still living in pain and agony with the government struggling to finance their pension obligations due to inadequate planning. Federal government workers who retired since March 2023 are yet to access their monthly pension benefits due to non-payment of their accrued rights which represent benefits for years of service up to June 2004, when the Pension Reform Act (PRA) that gave birth to the CPS came into effect.
The main issue is funding. According to the National Pension Commission (PenCom), the federal government released the sum of N100.29 billion in 2021 for the payment of accrued rights. That brought the total amount released by the government from inception to N980.18 billion. In March 2022, the government further released N14.92 billion, and some additional funds in February 2023. Since then, the government has been giving excuses, leading to harrowing experiences, and even deaths, among retirees.
Ironically, one major attraction in public service is the benefit of receiving pension after retirement. But over the years, such a prospect has become dim and problematic. The failure of the government to meet the pension expectation of retirees ends up shattering the lives of many. Indeed, many senior citizens who had no other source of living after service had collapsed and died while on queues waiting for their pensions. It was in a bid to move beyond this tragic situation that the Pension Reforms Act of 2004 was enacted. It was designed to address the failures of the old scheme—the Defined Benefit Scheme (DBS). In its place, the CPS was introduced wherein both the government and the workers themselves are to save up a given amount of their earnings towards building up an accumulated funds reserve which the worker can fall back on after retirement.
Complications in meeting up with the pension obligations had arisen fundamentally, as in the present case, due to failure to link those in the old scheme (DBS) with those in the new scheme (CPS). But even after it seems to have been done, the federal and many state governments had failed severally in remitting deducted sums from workers’ salaries to the Pension Fund Administrators (PFAs). The result is that neither government contribution nor workers’ deducted sums are credited to the accounts of the workers with the PFAs. This malaise is even more prevalent in the private sector where many companies do not remit their counterpart deductions to the PFAs as required by the Pension Act.
The provisions of the act had demanded that the government issues bonds in favour of retired workers, which will be redeemed to the PFAs who will credit same to the accounts of the individual staff. The non-remittance of the deductions of staff is a clear breach of the provisions of the Pension Reforms Act and that perhaps explains why pension liabilities in the country today run into hundreds of billions of naira. Even in instances when payments are made to pensioners, many receive a miserable monthly stipend of about N2000 each, an amount that could hardly transport them back to their homes under the current dispensation.
While we urge the federal and state governments to keep faith with their obligations to pensioners, we also call on the pension sector regulator, PenCom, to apply stricter measures in enforcing compliance with the provisions of the Pension Reforms Act by the PFAs. It is only fair and just to allow retired persons, after faithful service to the country, to live the rest of their lives in peace and relative comfort.
