Why not adopt contributory pension scheme with a human face?
IT is always difficult to understand why any global idea or model that works perfectly elsewhere would never do so in Nigeria, and it would leave many concerned citizens wondering if the country is not jinxed. The usual controversies trailing the issue of pension scheme in Nigeria is a case in point.
Ordinarily, such a scheme aimed at ensuring that workers are not forced into depression or destitution after retirement is both desirable and commendable. It was for that reason that every worker welcomed with open arms the idea at its launch in June 2004 under the Pension Reform Act which was later repealed and reenacted in July 2014.
A pension, we need to understand, is a retirement fund for a formal employee and it is paid directly into the employees Retirement Savings Account ( RSA) with the employer contributing ten percent while the employee also puts in eight percent of his gross income. The Pension Fund Administrators ( PFAS) then invest RSAS of contributors to earn a return on investment. Income generated from investing pension contribution is distributed based on the proportion of the assets in the individual’s RSA.
According to the proviso of the pension scheme, a retiree is entitled to a lump sum payment out of the balance in the RSA at retirement and after that, the monthly payment starts.
The model of getting monthly stipends are either through the Programmed Withdrawal ( PW) or Life Annuity ( LA). While the Programmed Withdrawal is paid to the retiree directly by the government, the Life Annuity is paid by the Life Insurance Companies. And then most importantly, collection of pension is supposed to commence as from the age of fifty for all those who for a reason or another had to retire before the statutory age of doing so.
Looking critically at the whole idea, one would consider it a master plan aimed at addressing the workers plight after retirement. But when the pitfalls attending the scheme are analysed and exposed, everyone will see very clearly where the programme has been bastardised in its implementation stages which explains why retiree are often confined to the camp of deprivation and lamentations.
To begin with, if the provision states that fifty years is the commencement of pension payments for those who left service earlier, what then is responsible for those who retire at the statutory age of sixty who are forced to return home empty handed without anything arranged for them monthly at least to keep body and soul together? Where is the lump sum the proviso states that they would receive at retirement and why must retirees’ keep waiting until many of them lose their lives?
Again, investing an individual’s RSA without prior discussion with or consent of the owner of the account is not different from shaving someone’s head in his absence! Moreover, that the decision on how to share the income generated on the investments is also taken by only a party to the deal while the other is kept in the dark is tantamount to allowing a contender in a contest to also be the only umpire and one can imagine what would always transpire under such obviously fraudulent arrangement. Besides, whoever conceived the idea of retirees waiting for a period of time, sometimes, as long as two years, before their bonds are ready for collection has not added compassion and sympathy to the equation at all.
Why subject people who spent their entire working life serving the state to such inhuman treatment? The manner in which pension issues are being handled in Nigeria clearly contradicts normal business ethics and procedures, and can only happen where there is an established culture of shortchanging people. The fact that no retiree has been able to challenge such preposterous arrangements does not in any way make it right or justifiable.
The agonies to which retirees are subjected and exposed can then be understood within a framework that primarily annihilates them and infringes on their right to decent living. It is completely insensitive and wicked of all those handling pension matters to place retirees on the endless waiting list leading quite sadly to sudden deaths of many of them because of their inability to source adequate funds for survival and also medicals.
It is wrong to assume that retired personnel must have children to take care of them or that they have other businesses or properties to fall back on. The gospel truth is that while it is true that some retirees are lucky to have those who would take care of them, there are still many others who neither have capable children nor any business or property anywhere and even have to start running helter skelter when their house rents expire.
Whatever has to be done, the sad narrative must be looked into and addressed in a manner that will bring succour to all retirees. With a strong determination by any willing government, it is possible to run a pension scheme with a human face and it makes absolutely no sense for retired workers to keep dying of hunger while some people are busy feasting on their hard- earned savings.
While waiting for the lump sum, the monthly stipends can be made to begin immediately people retire so they can keep managing that until the other is ready. The government can also commence Save Retirees Scheme ( SRS) whereby financial aid are made available to retirees to the tune of at least a million naira to the upper cadre and five hundred thousand naira to the lower level so that they can have something to fall back on while waiting for their entitlements and they must also be able to access more funds if the need arises.
Such a step will go a long way in addressing so many nagging issues concerning retirees. The other option of course is to ensure that all entitlements due to retirees are made ready at the point of leaving service without any excuse or delay.