Non-re­mit­tance of pen­sion funds

Daily Trust - - OPINION -

Fear for the safety of pen­sion funds has mounted fol­low­ing rev­e­la­tions that many fed­eral min­istries, de­part­ments and agen­cies of gov­ern­ment are not re­mit­ting them as and when due. Ac­cord­ing to the Pen­sion Fund Op­er­a­tors As­so­ci­a­tion of Nige­ria’s 2016 An­nual Re­port, the Fed­eral MDAs have since Oc­to­ber 2015 been fail­ing to re­mit the manda­tory pen­sion con­tri­bu­tions of most of their work­ers into their Re­tire­ment Savings Ac­count (RSAs) as pro­vided for in the Con­trib­u­tory Pen­sion Scheme un­der the Pen­sion Re­form Act of 2014.

Mostly af­fected by the de­vel­op­ment are direct em­ploy­ees of the min­istries who are not un­der the paras­tatals but are be­ing paid by the Na­tional Pen­sion Com­mis­sion (PENCOM) with funds pro­vided by the Cen­tral Bank of Nige­ria (CBN). Such ben­e­fi­ciary pen­sion­ers are there­fore liv­ing on bor­rowed money and time, and may be cut off from the wel­fare stream sooner than later since they are paid with other peo­ples’ money. As stated in the re­port, com­pli­ance with re­gard to re­mit­tances of pen­sion con­tri­bu­tions from the pub­lic sec­tor at both the fed­eral and state lev­els have lagged no­tably. While re­mit­tances from the Fed­eral Gov­ern­ment through the PENCOM were last re­ceived for Septem­ber 2015, some states have out­stand­ing re­mit­tances dat­ing back over two years. The re­port how­ever ob­served that the pri­vate sec­tor was more con­sis­tent than the pub­lic sec­tor, even with the de­pressed eco­nomic cli­mate.

The im­pli­ca­tion of this de­vel­op­ment is that prospec­tive pen­sion­ers who serve as em­ploy­ees of the fed­eral gov­ern­ment may not be paid their pen­sion when­ever they re­tire un­less the ar­rears on their RSAs are pro­cessed along with their ac­crued rights un­der the De­fined Ben­e­fits Scheme. In the cir­cum­stance only pen­sion­ers whose ar­rears are neg­li­gi­ble may be paid pen­sion ben­e­fits ahead of the re­mit­tances of the ar­rears on their ac­counts. Un­der­stand­ably the scathing re­port on the dis­hon­ourable acts of non-re­mit­tance by th­ese es­tab­lish­ments has at­tracted con­cern in var­i­ous cir­cles in the na­tion’s pub­lic ser­vice. The con­cern de­rives from the no­tion that pen­sion funds are ex­pected to en­joy some mea­sure of pro­tec­tion, be­ing the due ben­e­fits for dili­gent ser­vice by an em­ployee to an em­ployer which in most cases is the gov­ern­ment. More point­edly, the re­mit­tances by gov­ern­ment as em­ployer of work­ers is pro­vided for in the Pen­sion Re­form Act. Non-re­mit­tance of de­ducted pen­sion funds to­gether with the match­ing funds is il­le­gal and im­moral.

Top pub­lic of­fi­cers in this coun­try have tra­di­tion­ally treated pen­sion funds with dis­dain. Such funds have over the years been mas­sively pil­fered, the worst case be­ing the dis­cov­ery of mas­sive loot­ing of po­lice pen­sion funds as well as loot­ing by the fed­eral tran­si­tional pen­sion ad­min­is­tra­tion. While the Po­lice case was re­stricted to one agency, the present sit­u­a­tion is more wide­spread and it threat­ens work­ers through­out the main­stream pub­lic ser­vice. The dan­gers that this poses are in­cal­cu­la­ble. Not only does it mean that mil­lions of work­ers would be con­demned to mis­ery when they re­tire, but their re­al­i­sa­tion of this while they are still in ser­vice will de­stroy morale and se­cu­rity and ac­cen­tu­ate cor­rup­tion.

Since last year many state and lo­cal govern­ments as well as some fed­eral agen­cies have found it dif­fi­cult to pay their work­ers’ salaries as and when due. It fol­lows there­fore that when even salary is not be­ing paid, pen­sion fund re­mit­tances are even less likely to be made. The two prob­lems must there­fore be tack­led to­gether. Even when salaries are be­ing paid but pen­sion fund re­mit­tances are not be­ing made, the dam­age to civil ser­vants’ morale will still be in­cal­cu­la­ble. We urge the Pres­i­dency to re­gard this is­sue as an­other na­tional se­cu­rity emer­gency that de­serves prompt and sus­tain­able so­lu­tion. No one will of­fer his best ser­vices to­day if he is not as­sured of a happy fu­ture in re­tire­ment.

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