PENSION: The Dilemma of
Retirees
Yushau A. Shuaib
The event was a modest send-forth party to
honour new retirees from the public service. After serving the nation to
the retirement age, some of them still looked radiant while others were
haggard as everyone at the occasion poured genuine encomiums on their
uprightness and sense of brotherhood. They held several positions of
responsibility, some of which were sensitive to the nation’s political
economy. In fact most of them were epitomes of patriotism, loyalty and
dedication as they served their fatherland diligently without demeaning
their integrity.
When it came to their response they narrated
their experiences in the service and in an emotion laden voice, they
passionately appealed and prayed for prompt payment of their gratuity
and pension. The young workers at the ceremony were moved and really
scared of what may befall them in the near future knowing how some
pensioners were abandoned to abject poverty and humiliation to death
after their meritorious service to the nation.
Most of pensioners in financial dilemma had
served in the civil service, academic environment, teaching profession,
railways and forces (military and paramilitary). The pauperization of
those retirees is quite unfortunate if we recall that those were the
people who taught and mould generations of leaders, formulated and
guided our economic policies, designed and developed our institutions
and staked their lives to keep the nation united. The emerging
private-sector driven economy has largely depended on their services.
For instance, the retirees during their service years were involved in
the registration of businesses, issuance of different kinds of licences/approvals,
provision of services, supervised supplies and contract executions while
those of them in the military and paramilitary services provided
adequate security to lives and properties.
Yet apart from providing those services and
security for the advancement of our nation, some of the retirees were
never recognized and died unsung. In an iniquitous assessment, a section
of the society scornfully bashes the living retirees by insisting that
the reward of a teacher is in heaven, that the retired service personnel
has no right to contest for public office and that a civil servant is
corrupt.
It is the survivalist instincts in some of
the retirees that with beggarly dispositions, they move about
establishments soliciting for assistance or searching for degrading
menial works even brandishing their qualifications and experiences to
win sympathy. Apart from those who become burdens to their
grandchildren, the worst are those on the streets with stretch palms
pleading for alms in most ridiculous manner.
This pathetic societal scandal has always
been rampant amongst those who served in the public service. The fear of
unknown after retirement coupled with outdated condition of service that
didn’t encourage savings and other profitable activities, compelled the
smartly intelligent or crookest minds to engage in
unethical practices to guard themselves against indignity of penury in
perpetuity after the service.
The good news however is that the gory
sights of the malnourished and aged pensioners who are wheeled-barrow on
the queue to collect stipends that may not adequately cater for their
medication, is coming to an end with the positive development in new
pension administration in Nigeria. When President Obasanjo inaugurated
the National Pension Commission (PenCom) on December 15, 2004 some
skeptics would have brushed it aside as an agency for the “boys.”
The Commission has within the short span of its existence put the
critics wrong as it has demonstrated its commitment to correct the
wrongs of the past in the pension administration in more matured and
professional manner.
Interestingly the Commission in its two
years of its existence is more concerned in wooing the patronages of
stakeholders through its transparent procedures, consultative dialogues
and public enlightenment than enforcing compliance, which is one of its
powers in the Pension Act. In one of its seminar on Private Equity and
Entrepreneurship, its Director General, Mr. Muhammad Kabir Ahmad
disclosed that the amount of pension funds in custody was about N600
billion. He disclosed further that under the contributory pension
scheme, which came into being through the Pension Reforms Act 2004, the
FG and multinational companies as well as big institutions have been
remitting funds regularly to the Pension Funds Administrators (PFAs).
The scheme works in a simple way where
workers monitor their contribution closely for rainy days as they have
the right to choose their Pension Fund Administrators. Each worker is
expected to open Retirement Saving Account (RSA) from where he receives
a pin number with a Pension Fund Custodian (PFC) that collects a
percentage of the worker’s contribution for onward lodgement with a
pension administrator for proper investment. On retirement the pensioner
can easily access his pension fund without the hiccup of the past.
The worker’s contribution is a predetermined
percentage of his monthly emolument as employee and from his
organization as employer. It comes in two folds: minimum of seven and
half percentage from him as employee and similar minimum amount from the
employer making a total of 15% monthly contribution except in the
military service where its member contributes two and half percent and
12.5% from the authority. These are the contributions that are wisely
invested on behalf of a worker which earns interest or profit as the
case may be. Most of the developed nations and even South Africa have
utilized the huge deposit provided by pension funds to boost their
economic activities and strengthen the purchasing power of pensioners
who live like king after retirement apart from providing welfare
packages to aged citizens who never worked in pensionable organisations.
While the new pension scheme encourages
savings, it has a lot of advantages and potentials for higher benefit
than the previous arrangements as the return on investment is largely
dependent on numbers of indices that include economic growth, minimum
pension guarantee and the investment expertise of the individual’s PFA.
To allay the fear that only future retirees
in the next few years would be the major beneficiaries of the new
scheme, the Federal Government recently commenced payment of pension
arrears with over N1 billion paid throughout the federation in few days
of the exercise. At a ceremony to flag-off the exercise conducted by the
Minister of Finance, Mrs. Nenadi Esther Usman, 332 pensioners were said
to have received N320 million. The highest paid pensioner went home with
N6 million while the lowest paid received N500,000. So far about N15
billion has been paid out to pensioners in a continual exercise.
With the success of the scheme at the
Federal level through the diligence of PenCom management, it has also
received the endorsement of governors for its extension to states and
local government councils. A draft bill to be presented by governors to
their respective legislative houses was adopted at one of the meetings
of the Council of States at the Presidential Villa, Abuja. It is hopeful
that the passionate prayers of the Nigerian pensioners may afterall be a
reality while they are still alive.
Yushau A. Shuaib
National Press Centre
Abuja
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