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THE PENSION MESS

By NBF News
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A picture of a typical scene where our retired pensioners converged for the monotonous, compulsory yearly biometric data appraisal reflects a pathetic and emotion-laden scenario. It is no longer news that handful numbers of these elderly retirees have collapsed and died while queuing for their stipends and this, no doubt, daily sends jitters through the spines of the present generation of workers.

These are Nigerians, who after spending the better part of their years serving the country, are now languishing in abject penury as a result of the shoddy and lackadaisical attitude the government they once served is now handling their cases.

Besides the stress the pensioners are often subjected to in assessing their monthly stipend, which may be as low as N3,000 and N4,000, assessing their gratuity may be compared to what the Holy Book says walking through the eyes of a needle.

A reference case is that of Pa Bada Adeyemi Thomas, who retired as vice principal on grade level 15 on January 1, 2006 from the Teaching Service Commission in Akure, Ondo State, after putting in 35 years of service but yet to access both his pension and gratuity five years after retirement.

As at the time of retirement, Mr. Bada was expected to have been paid N236,886.33, which then could have been able to take care of some investment but which the inflation have eroded now.

Despite the fact that he has participated in the past biometric enrolment task team initiated by the Federal Government and was able to establish his case, which include omission of name from pension nominal roll; non-payment of gratuity; non-harmonisation of monthly pension and non-enrolment for monthly pension, he is still on the waiting list.

Not even the promise from the government that he would receive payment in respect of the complaints within two weeks subject to validation of his record which he submitted to the task team was kept, as the old man continue to advance in years without any hope of sustainability. According to the Chief State Secretary, Nigeria Civil Service Union (NCSU), Comrade Olasunkanmi Olubadejo, government at all levels undermine the importance of old citizens and often treat them with disdain most especially in the organisation of the biometrics task.

He noted that the biometric which is conducted to identify those who may have died in order to stop payment to the deceased could be conducted every five years or perhaps decentralised as the retirees normally go through a lot of stress during the programme. 'The pensioners are our fathers and mothers who have given their best to this country. But it is unfortunate that they are not well taken care of by all strata of the government.

'I mean pensioners,, be it military or civilian are not well taken care of at all,' he lamented.

Perhaps, this might have necessitated the great reforms introduced by former President Olusegun Obasanjo Administration in the re-packaging of the pension system in the country. Legitimised by the Pension Reforms Acts of 2004, the new pension scheme, is aimed at wiping away the tears usually associated with pension administration in the country.

The contributory pension scheme ensured that both the worker while still active in service and his employer, steadily make contributions into a Retirement Savings Account (RSA), from where the pension entitlements of the worker is eventually paid, when he/she retires from service. This is the spirit of the scheme.

However, the hope that the contributory pension scheme adopted in 2004 would resolve the perennial problems encountered by pensioners after years of meritorious service might have been outshined by the recent barrage of complaints from dissatisfied beneficiaries.

The worry that senior citizens may result to a situation where they would go back to menial jobs to cater for themselves or sometimes result to beggarly behaviours (in a country they spent their productive age to serve) in order to feed might not stop in the nearest future unless grey areas in the scheme are properly addressed.

The recent threat to the scheme is in the area of lumpsum payment, which the retirees are accusing their various PFA of underpayment.

Over 74 retired officers of the Nigerian Customs Service have accused their various PFA of improper calculation and inadequate payment of the lumpsum pension benefits. In a letter addressed to the Director-General of the National Pension Commission by the Civil Liberties Organisation (CLO) on behalf of the retired officers, who retired from the Nigerian Customs Service in the year 2010 at various ranks there was disparity in the lumpsum payment.

'Quite strangely, some of the officers were paid the lumpsum of 50 per cent in line with Section 4 (1) (c) of the Pension Act by some Pension Fund Administr ators, while others of the same rank, same grade level and same exit period from the service were paid the lumpsum of 25 per cent under the pretext of Section 4 (2) which section is only applicable to categories of persons under section 3 (2) (c) of the Act.

'Curiously, some officers who retired this year (2011) were paid the 50 per cent lumpsum while our clients who retired in 2011 were paid at 25 per cent or less without specifying the yardstick and the criteria used in such computation when both groups are under the same scheme against the principle of uniformity of rules and standard provided for in Section 2 of the Act,' the CLO said.

The CLO group added: 'It is worrisome to note that the interpretation by your office of Section 4 (1) (c) and Subsection (2) of the same section and the resort to 25 per cent where the resort to 25 per cent is not up to 50 per cent so that the balance would be sufficient to fund a programmed withdrawal over an expected lifespan of not less than 50 per cent of his annual remuneration at the rate of retirement appears a one-sided and defeatist in nature.'

The human rights group noted that even if the lumpsum is not up to 50 per cent, the resort to 25 per cent is not applicable as the provision of Section 4 (2) contemplates a different situation which is specifically mentioned in Section 3 (2) (c).

Explaining further that the law states that the option must be with consensus of the retiree through the advise of the PFA to take the nearest reasonable percentage available. 'Furthermore, the Act, under Sections 72 and 73, makes provision for the investment of the retirees' funds in certain specified investments with accruable interest which must be added to their benefits.

'It appears that your office and the relevant PFAs ignored that section of the Act and it would therefore be imperative for your office to ensure that in the interpretation of the provisions of the Act for the benefits of our clients, relevant sections should be interpreted together to reflect the intention of the legislature,' the human rights group demanded.

The group lamented that given the current happenings, the objective of the scheme, which 'establishing a uniform set of rules, regulations and standard for the administration and payment of retirement benefits for the public service of the federation,' as espoused in Section 2 is almost defeated. The chairman of the group, Olusegun Awoku whose PFA is Stanbic IBTC Pension Managers Limited lamented his ordeal before he was eventually paid 25 per cent lumpsum, which according to him runs in contrary to his expectation.

He explained that his PFA could not pay him until seven months after he has retired, thereby forcing him to incur debt which the lumpsum given could not offset. 'Throughout the seven months before the payment, I was just being tossed from IBTC to Pencom. The scheme gives room based on your age, but this now is being misinterpreted by the PFA,' he said.

Awoku, who retired as a Deputy Controller, said that with the new pension scheme, every pensioner is expected to be paid or allowed to withdraw a lumpsum of money from his account on retirement leaving enough in the account to enable the retiree receive an amount that will not be less than 50 per cent of the last monthly salary on a regular basis. Which equally depends on the agreement reached between the parties.

The chairman of the group who retired with over N10 million wondered how the IBTC could have concluded in paying him N2.5 million without any form of agreement or negotiation.

'I understand that having retired above 50 years I supposed to get 50 per cent lumpsum, and if this would not be, then I supposed to have a say in whatever figure the PFA would arrive at, but this was not the case,' he said. Awoku, who is also being paid N64,000 as monthly stipend wondered what would be the correlation between his last pay of N350,000 and N64,000. He revealed that his group was formed in March this year, having realised that most of the officers who retired after June 2010 are now paid 25 per cent which had never been the situation in the past.

'The whole system is calculated to kill workers. If a worker under 50 dies, the next of kin cannot assess the benefit of the diseased. It has no end, once the family cannot assess it, who then benefit from it?' he queried.

Workforce, however, discovered that Awoku might not be far from the truth on the deceased benefits as a staff of the Stanbic IBTC confirmed that some families of the deceased have not been able to assess the benefits of their dead loved ones because of the tough requirements the next of kin supposed to fulfill in case the deceased died without a will.

'What many contributors do not know is that, under the contributory pension scheme, without leaving a will behind, their relatives cannot have easy access to their pension benefits, if they suffer untimely death.

Section 5(2) of the 2004 PRA states: 'The PFAs shall apply the amount in favour of the beneficiary under a will or the spouse and children of the deceased or in the absence of a wife and child, to the recorded next of kin or any person designated by him during his life time or in the absence of such designation, to any person appointed by the Probate Registry as the administrator of the estate of the deceased.'

Aside from the tedious process of getting a letter, which may take up to six month, the next of kin will still have to pay, at least, 10) per cent of the pension benefits as a fee. It was discovered that some relatives of the employees in the junior cadre may as well concluded not to pursue the benefits of their loved ones who died intestate realising the amount` they have to spend to get the meager benefits.

The Director General of Nigeria Employers Consultative Association (NECA), Olusegun Osinowo, said the body has often advised its members to lecture their employees on the importance of preparing their will in order to save their loved ones the stress involved when a worker died intestate. He reasoned that though most retirees presently complained of being underpaid, the NECA DG said the younger generation of workers who still have 20 to 30 years to work are the ones that would benefit from the scheme. Investigation, however, revealed that preparing a will may not be so easier for many workers, bearing the cost of preparation which may cost as much as N150,000 to N200,000.

Another thought provoking issue which the PFAs and Pencom seem not to have given thought to is the static monthly stipend over several years in spite of the inflation, despite the fact that the beneficiary's fund is being invested. On that, the NECA DG believed that the scheme was relatively new and is subjected to re-appraisal and fine-tuning whenever any grey area is detected to make it more beneficial to contributors.

Though the PFAs who currently have issues with their retirees also claimed that they have been able to put smiles in the faces of some retirees, it would be beneficial to the scheme if transparency is the key for all. A situation where some PFA pay 50 per cent lumpsum and some pay 25 per cent without proper dialogue with the beneficiaries reels of injustices.