Pushing for Full Implementation of Pension Reforms Act 2014…
As a follow-up to the enactment of the Pension Reform Act 2014 to ensure good life for pensioners, the National Assembly has called for the full implementation of the law to ensure that retirees under the Defined Benefits Scheme enjoy comfort in retiremen
Although Nigeria has crossed a milestone in reforming its pension system, much more needs to be done to ensure that never again would retirees, who have served their fatherland meritoriously, roam the streets begging for alms. The ongoing pension reform in Nigeria started with the enactment of the Pension Reform Act, 2004; which established the National Pension Commission (PenCom) and the Contributory Pension Scheme (CPS). That became necessary because the Defined Benefits Schemes were not fully funded by governments across the country. Relief came the way of retirees under the old scheme in 2013 when the Federal Government reformed the Defined Benefits Scheme with the establishment of the Pension Transitional Arrangements Directorate (PTAD). One year after PTAD was established, the Pension Reform Act, 2014 was enacted to repeal and replace the 2004 Act. The new law gave PenCom regulatory roles over PTAD and further strengthened the Directorate to deliver on its mandates, including ensuring that pensioners under the Defined Benefits Scheme get their pensions as at when due.
Prior to Pension Reform
Before the establishment of PTAD, the Federal Government had set up the Pension Reform Task Force, headed by Mr. Abdulrasheed Maina, to reform the Defined Benefits Scheme. Members of the task force were later alleged to have helped themselves from the money meant to pay pensioners to the tune of billions of naira while many of retirees died in poverty.
Just lately, Maina and some members of his team, now answering fraud charges at various law courts, were sponsoring intensive media campaigns to disparage the revelations made by the National Assembly and showcase some unconfirmed achievements recorded by the team in an attempt to convince the President Muhammadu Buhari to reinstate them. However, giving vivid details of the discoveries of the Senate Committee on States and Local Governments in the seventh National Assembly, its Chairman, Senator Kabiru Gaya, observed that prior to pension reform in the country, government found it extremely difficult to address the issue of pensioners roaming the streets of major cities begging for alms as a result of non-payment of their pension or negligence on the part of those coordinating the pension system.
Addressing participants at the just concluded Stakeholders Sensitisation Conference on the Pension Reform Act, 2014” in Abuja, Senator Gaya recalled that under the Defined Benefits Scheme, many retirees died because of delay or refusal of government to pay their pension while negligence on the part of those who managed pension fund contributed to the plight of retirees under the old scheme. “The Defined Benefits Scheme caused death of retirees because their pension were either delayed or not paid at all for a long period as a result of corruption. The introduction of the Contributory Pension Scheme will reduce corruption to the barest minimum if not erase it and stiffer laws and penalties should be looked into,” he said. Reflecting on “Consolidating the Gains of Pension Reform in Nigeria,” Senator Gaya painted a gloomy picture of the Defined Benefits scheme prior to the establishment of PTAD in 2013. According to him, the Defined Benefits scheme was plagued by “lack of funding, insufficient budgetary provisions, mismanagement, maladministration, inadequate legal framework and constant death of retirees while awaiting their entitlements and high corruption” among other things. Also, giving an insight into the findings of the National Assembly Investigative Panel on Pension, Senator Gaya said pensioners found it difficult to get their entitlements.
“Some of our members cried when they saw the pains these pensioners were going through. Some of them have gone mental because they were asking for the claims and they could not get them and some of the people handling pension fund were having good time and good foods on their tables. I personally assisted one of them financially because he was telling us several things as if we were the civil servants that failed to pay their pension.”
“During our investigations, we found that money was kept in banks for years and pensioners were not being paid. One organisation paid N5 billion while it had N21 billion in its purse kept in banks generating interest while it refused to pay pensioners,” he said. He also stated some of the challenges the National Assembly surmounted in the course of making the pension laws saying “during our pension probe we had situations where some members of the Task Force became forces that we cannot fight. When we collated the report for the Chairman of the task force and members of his team to account for N195 billion, we invited him but he refused to appear.”
Legislators’ Effort
Members of the National Assembly have observed that with the establishment of PTAD the gory tales they enumerated above is now a thing of the past. The Directorate is working very hard to bring back smiles on the faces of pensioners under the Defined Benefits Scheme. The law makers also noted that to sustain the successes so far recorded with the old scheme, there is need to further strengthen PTAD by fully implementing the new pension law. Assuring PenCom of the support of the National Assembly in implementing the Pension Reform Act, 2014 fully to meet the expectation of workers and retirees in the country, Senator Gaya recalled that Lawmakers had in the past made useful recommendations towards the successful reform of the pension industry and would support PenCom and other pension stakeholders to continue delivering on its mandates. “That is why we made about 122 recommendations to the Senate which include that funds should be in the custody of the Central Bank of Nigeria (CBN) not in commercial banks and that those already in commercial banks should be returned to CBN. I want to assure you that the National Assembly is ever supportive of the strengthening of this Act to alleviate the sufferings of our elder statesmen,” Gaya said. He also encouraged the stakeholders in the pension industry to uphold best practice in the administration of retirement benefit fund in the country saying “PenCom, PTAD and all others should be diligent, prompt, transparent, honest and sincere in their days of service because they are also close to the net.” “For us to move forward in this country, we have to fight corruption. We have to be sincere in our jobs and for those who steal so much, once you cross a certain level all the money you accumulate is a waste,” Gaya admonished. The Deputy Chairman of the House of Representatives Pension Committee in the 7th National Assembly, Hon. Samson Okwu, also supported Gaya on the need to fully implement the new pension law. Also speaking during the recent Stakeholders Sensitisation Conference in Abuja, he encouraged pension stakeholders to fashion out ways to fully implement the new pension law to ensure that self-employed people and workers in the informal sector are brought under the Contributory Pension Scheme. “I charge professionals to look into the law and system such that we can give guarantees to contributors. Your contributions will pave the way for us to learn how all Nigerians can key into the system such that we will have a guaranty of savings for all Nigerians such that even the Welder by the road side can be part of the scheme.” “The eighth National Assembly will partner the industry and we will work together to make the pension system better,” Okwu assured. Justifying their push for full implementation of the law, the Legislators observed the Contributory Pension Scheme is working perfectly and according to plans. The Scheme, is fully funded and retirees under it are getting their pension as at when due. There has not been any case of fraud or corruption in the system from inception, they said. The legislators however, noted that the only way to ensure that the gains so far made with the Defined Benefits Scheme will not be reversed was to fully implement the Pension Reform Act, 2014. This will also ensure that situations where fund managers under the old scheme come in contact with pensioners’ money and may be tempted to divert or mismanage will be completely avoided. The era where managers of the scheme deposit pensioners’ money to earn interest while pensioners wallow in abject poverty will be gone for good with the full implementation of the new pension law, they maintained. According to the law makers, for the Defined Benefits Scheme to succeed, it is important to further strengthen PTAD and ensure that the Central Bank of Nigeria (CBN) continue to keep custody of all the money meant for pensioners under the Defined Benefit Scheme and pensioners’ entitlements continue to be transferred directly to their bank accounts from the apex bank after verification. They want retirees under the old scheme to enjoy good life in retirement as much as their colleagues under the Contributory Pension Scheme, insisting that it is only the full implementation of the new pension law that will make all these possible.
About PTAD
Established August 2013 in line with provision of Section 30(2) (a) of the Pension Reform Act, 2004 and now Section 42(1) of the Pension Reform Act 2014, the PTAD took over the management of the Defined Benefits pension schemes of federal parastatals and agencies and has been implementing a new structure, which is a clear departure from the old system and also introduced a new orientation to service delivery to meet the needs of pensioners.
The Pension law directed Directors of the Civil Service Pension Department, Police Pension Department and Customs, Immigration and Prisons Pension Department to report to the Executive Secretary of the Directorate. Also, all the Boards of Trustees of pension schemes being operated by FGN parastatals report to PTAD.
The agency however prides itself as “progressively working hard” to sanitise the pension administration system and restore public confidence through effective management, accountability and transparency and alleviating the sufferings of pensioners through regular and prompt payments, constant communication and easily accessible to retirees.