Pension funds: Dark days not over for DBS pensioners

Since the Federal Government approved the establishment of the Pension Transitional Arrangement Directorate (PTAD) to oversee the Defined Benefits Scheme (DBS) in Nigeria’s pension industry, the directorate has been battling to tackle the bottlenecks in the scheme.

Though a provision has been made in section 30 sub-section (2) (a) of the Pension Reform Act of 2004 (now amended and replaced in section 42 (1) of the Pension Reform Act 2014), it was not until August 2013 that the Federal Government established PTAD to administer the pension funds of pensioners not transiting to the Defined Contributory Scheme (DCS).

This category of pensioners included those in the civil service pension, police pension, the pension/boards of trustees of all federally funded parastatals and customs, immigration and prisons pension.

Less than two years from the take-off of PTAD, thousands of duplicated names of pensioners have been weeded out of government payroll, genuinely excluded pensioners have been included on the payroll, but it does not appear that the dark days of pension corruption are over

aily Trust looks at the bottlenecks bedevilling the DBS and efforts being made by PTAD to tackle them.

Credible database of DBS pensioners nonexistent

There is still no existing comprehensive and credible database of pensioners whose pension funds are coordinated under the DBS, a development which could affect the accuracy of budgetary estimates of existing pensioners and the officers exempted from the CPS in line with PTAD’s mandate.

The Director General of PTAD, Mrs. Nellie Mayshak, reportedly said last year: “I did not inherit any data base of pensioners when I came into office. Currently, we have a lot of challenges with the payroll we are using to pay pensioners.”

To arrest this situation, the directorate commenced pensioners verification and biometric data gathering of all pensioners operating under the DBS, but there is still a long way to go as the verification commenced in December last year in some parts of the country.

Until this process is completed and the entire pensioners under the DBS in the country are accounted for in a comprehensive database, the dark days of pension corruption may not yet be over.

However, there are indications that PTAD is taking steps to solve the challenge as the Minister of Finance and the Coordinating Minister of the Economy (CME), Dr. Ngozi Okonjo-Iweala, revealed, last week, at PTAD stakeholders forum in Abuja that 15,000 ghost pensioners have been weeded out of government’s payroll.

Many pensioners excluded from the DBS

Indications have emerged that many retired government workers have been without pension entitlements since retirement because they were excluded from the pension scheme.

Due to budgetary constraints and poor database of pensioners with multiple duplications of non-existing pensioners, many eligible pensioners were excluded from the payroll.

Okonjo-Iweala, while speaking at the 2015 stakeholder’s forum, disclosed that 1,254 of such excluded pensioners have been included lately in the scheme due to the removal of ghost pensioners from the payroll.

Pension funds leakages

Over the years, pension funds in Nigeria have been bedevilled with massive corruption, especially in relation to the DBS.

In 2012, pension scam of N32.8 billion from the Nigeria Police Pension funds was uncovered and the public officers involved in the scam were arraigned. in court.

At the D stakeholders forum, the minister of finance revealed that through the activities of PTAD, Nigeria now saves N2.1 billion annually, a huge amount of money that would have been looted by scammers through duplication of pensioners and inclusion of ghost pensioners in government payroll.

More of these leakages could be blocked through the ongoing verification and biometric capture of pensioners currently covering police pensioners across the nation but the process still has a long way to go to capture all pensioners under the DBS.

Payment automation

Meanwhile, to block these leakages, Government Integrated Financial Management Information System (GIFMIS) was introduced to automate the payment system as a means of curbing corruption.

Mrs. Mayshak said the directorate prepares and submits the monthly payroll of pensioners to the office of the Accountant-General of the Federation for direct payment from the budgetary allocation maintained with the Central Bank of Nigeria to pensioners’ bank accounts.

This process eliminates intermediaries where pension fund thefts are carried out but until duplications and existing bank accounts of nonexistent pensioners are utterly eliminated, the theft will continue electronically.

A toll-free call centre

The recent toll-free call centre launched by the directorate could go a long way in mitigating the plight of pensioners who sometimes find it difficult to get immediate information on the status of their pension funds.

This is largely due to the consolidation of all erstwhile pension offices of the civil service, police, customs, immigration, prisons and other federal government parastatals, thereby increasing the number of pensioners the directorate is managing.

While many gains, like the commencement of the monthly payment of the 33 percent pension increase since October last year, have been attained in the DBS, the dark days are not over yet until the system is seamlessly cleaned.