Pension: When Fraudsters Take Advantage of the Old, the Dead
One major obstacle to the pension reforms in Nigeria is the growing activities of syndicate groups which capitalise on the desperation of pensioners and families of deceased to accelerate payment of their entitlements by extorting them, reports Festus Aka
There is no gainsaying the fact that the revolution in pension fund administration and management triggered by the approval of the applications of 13 firms as pension fund administrators and the popularity of the Pension Fund Act (the twin development that took place in 2004) had restored the hope of Nigerian workers on the possibility of a life of bliss after retirement.
This positive sentiment gained ground especially 10 years later when former President Goodluck Jonathan signed the Pension Reform Bill 2014 into law.
The new law, which is meant to govern and regulate the administration of the uniform pension scheme for both public and private sectors in Nigeria, repealed the Pension Reform Act, No.2, 2004.
However, watchers of the activities of the pension fund administrations in recent time are compelled to conclude that considering the frequency and sheer weights of complaints trailing the activities of pension fund administrators, the National Pension Commission (PenCom) is not doing enough in the area of supervision of the administration of pension by the relevant firms licensed to do the job.
Syndicate’s Haven
Some of the complaints bordered on the complexity of the process of applying for payment of pension after retirement and exploitation of the desperation of retirees or families of dead members to access contributions.
This was the experience of Mariam, a widow, whose husband, late Abdulrafiu (not full name), a former employee of Cadbury Plc died in 2013.
It was her turn to experience the extortion of a syndicate in pension administration when she approached an outlet of her husband’s pension fund administrator- Stanbic IBTC Pensions Managers, in her bid to collect his contributions.
In an interview with THISDAY last week, the widow explained that she approached an outlet of the pension fund administrator in Agege area of Lagos to begin the process of claiming her husband’s pension savings.
According to her, a female agent of the company who attended to her explained the widow needed the service of a lawyer before she could have access to the money.
Giving a breakdown of what transpired, Mariam said the lawyer who she met through the agent of the pension firm wanted to charge 10 per cent of the total money while she was also informed that she would lose additional 10 per cent of her late husband’s contribution to the “government” before her files could be treated.
Prompt Response
When THISDAY contacted some officials of the pension fund administrators, it was a different story altogether. Apart from springing into action with the promise to investigate the matter, the management ruled out any payment before pension fund could be disbursed.
According to Head: Marketing and Communications, Stanbic IBTC Group, Nkiru Olumide-Ojo, none of the staff or agents assigned to interface with the beneficiaries are to discuss matters relating to compensation for facilitating the payment of pension by the firm. She assured our correspondent that she would dig into the issue.
Also, in one of several responses to THISDAY enquiries last week, an official of Stanbic IBTC Pension Managers Limited, Tofunmi Oluwashina, said: “Further to your telephone conversation with one of our representatives, Stanbic IBTC Pension Managers Limited will like to reiterate we do not accept any form of payment for processing benefits application as this is against our culture as an institution.
“We request that you provide us with the details of the next of kin to enable us contact her. Kindly also provide the details of the agent who the next of kin interacted with on her visit to our branch so that we can investigate the issue.”
How Vulnerable are Pensioners?
However, a source said while the staff of the pension fund firm may not be directly linked with extortion of beneficiaries of pension funds, he maintained that it is highly probable that a complex web of conspiracy might have been strewn by some people connected to pension firms and some lawyers who are wasting no time in cashing in on the vulnerability of relatives of deceased pensioners to make money.
“I think what they do is to direct people like Mariam to these dubious lawyers who use legal jargons to confuse these pensioners and relatives of the deceased,” the source said.
However, another management staff of Stanbic IBTC who later spoke with our correspondent advised pensioners and their families to avoid any financial transactions with agents of the company while applying for their pensions.
She explained that families of a deceased subscriber who cannot present the deceased will alongside other relevant documents should approach courts to apply for letter of administration. She explained that although a percentage of the pension would be paid to the court, she however doubt if the fees would be up to 10 per cent.
Fraud targeting pensioners is not a new phenomenon; it has been an age long crime, even in civilised societies. This prompted several researches by different groups into this type of crime. One of such researches was conducted by Citizens Advice, which alerted those approaching retirement that criminals are ever seeking new ways to defraud pensioners.
The group reviewed 150 cases of fraud involving pensioners and identified various kinds of such scams including those encouraging pensioners to move their savings into a purported ‘new’ pension, fake investment opportunities and those offering apparently ‘free advice’ and support which actually costs money.
The organisation observed that in some cases pensioners were charged a fee for a service that is not necessary, while in some other cases pensioners were encouraged to send personal information and bank details, either by email or phone. It therefore, advised pensioners and those about to retire to be wary of the rising incidence of pension scams.
Pencom Rising to the Occasion
Interestingly, Pencom appeared to have woken up from slumber in its fight against fraud in the sector last week when it launched a media campaign against the scourge.
An article circulated from Pencom office last week alerted Nigerians to the activities of fraudsters who have been fleecing pensioners over dubious claims.
The article quoted a pensioner who pleaded anonymity as saying that he got a call from someone who introduced himself as working in the Pension Transitional Arrangement Directorate (PTAD) and was willing to help him to process his gratuity and pension very fast. He said after series of discussions, he sent his employment details to enable the man process his pension and after some days, the person called back to demand a token of N50,000 so that he will use the money to grease the palms of the people who will endorse his file.
The pensioner said he got excited and was ready to part with the money demanded since it was very small compared to what he was expecting as gratuity and pension. The retiree volunteered to take the cash to the imposter who rather gave him an account number to pay in the money. He said he told the man he was willing to bring the cash himself or pay with a bank draft but the imposter turned down the offer. He then became suspicious and cut off from him and he has not called him again, knowing his game was up.
The case of another retiree was not too different from the one above. His caller identified himself as a staff of PenCom and offered a similar assistance in return for some money to grease the palms of the officers who will approve the payment. He said he got suspicious and rushed to PenCom’s office for further enquiries only to find out that the caller was a fraudster.
According to Pencom, many retirees, particularly those under the Defined Benefits Scheme have had similar encounters with fraudsters at different times. While some were as lucky as the pensioners above, having realised in time that the people calling them were imposters, others were not so lucky. They were duped and their financial predicaments worsened before they knew what was happening.
The publication quoted the Chief Executive of Citizens Advice, Mr. Gillian Gup, as saying that scammers see pensioners as prime targets. According to him, “there are many people looking to benefit from the new pension rules, including scammers. Fraudsters can ruin people’s retirement plans by taking a portion or all of a victim’s pension pots.”
In Nigeria, Many retirees are victims of pension fraud, particularly those that retired under the Defined Benefits Scheme (DBS). Many have parted with various amounts of money to induce some non-existing pension officers to approve their gratuity and pension. Some others have received calls, telephone messages and electronic mails demanding for money to speed up the processing of their pension and gratuities only to be duped by fraudsters.
Fraudsters often succeeded in duping pensioners because many workers close to retirement age are usually confused about how to access their retirement benefits. Dependants of missing and deceased workers and retirees also fall victims to fraudsters.
Stakeholders in the pension industry, including regulator, retirement savings managers, and pension experts have all warned retirees and workers nearing retirement age to be wary of the activities of pension fraudsters. “You are not required to pay money to anybody to be able to access your pensions and those demanding tokens to help you process your gratuity and pension are fraudsters. Be warned,” they stressed.