Nigeria Pensioners
Nigerian Pensioners

By AYOOLA OLAOLUWA

Thousands of Federal Government workers who retired from 2019 till date are currently groaning over the non-payment of their pensions and gratuities by the government, a situation which has put many of them in a precarious situation.
According to Business Hallmark findings, while some workers who retired in 2019 have been paid their retirement benefits, many others have not been paid. Those that retired in 2020 are worse off, with the government still owing all of them over 12 months of unpaid dues.
Due to the non-payment of their benefits and their inability to make alternative savings during their active years in service, several of the retired workers are now in deplorable state. Some of the affected pensioners who spoke with our correspondent lamented that they have been reduced to beggars and refugees in the country where they toiled endlessly and dissipated their sweat to serve.
A pensioner who served with the Federal Ministry of Education, Mr. Ishola Akolade, told our correspondent that he had been relying on his children to provide him his basic needs since he retired from service in August 2019 without gratuity or pension.
“Thank God that I have grown up children that are working, who will I have run to? I have colleagues who have no children or that gave birth very late and are still rearing children in retirement.
“One of us who retired in 2019 was forced to withdraw his children from private schools for public schools owned by the Lagos State government.
“Though I also have challenges, my own situation is far better. When my house rent expired in 2020 and my landlord was troubling me, I have to relocate to our family house in Ibadan.
“The money for my drugs and feeding are provided by my children who send me monthly maintenance allowance. You can see that my case is far better than those of my peers. If I come to this world again, I pray that I will not come as a Nigerian”, Mr. Akolade prayed.
However, another retiree, Mrs. Ayodele Coker, a former teacher in one of the Federal Government owned Unity Schools in Lagos, said she learnt her lessons a long time ago, and adequately prepared for life after retirement.
“While I was still in service, I am talking of about 15 years ago, I used to pity some of our senior colleagues who used to come to us begging for alms years after their retirement.
“They were taking wares like Iru (locust beans), crayfish, dry pepper and other goods around schools to sell in order to survive. Most times, the products are not up to N20,000.
“Their plights really troubled me. I vowed that I won’t allow myself to be in that kind of situation. I subsequently opened two private pension accounts with UBA and GTBank, separate from the government imposed RSA, and was saving about N50,000 monthly.
“I was able to save N1.2million in the first two years. And as my salary increased, I also increased my contributions. By the time I retired as a director fifteen years after, I have several millions of naira from my own contributions and returns on investment from the banks.
“As it is, I can afford to pay myself N150,000 monthly pension for five years until my pension from the CPS will be ready. I also supported my husband to complete our own house and moved into it before we both retired.
“That is what is saving us now. Apart money for feeding and our drugs, we don’t really have much need for money. We are no longer training children as all our children are graduates and on their own. I thank God that I learnt early and took my own destiny into my own hands”, Mrs. Coker said.
It would be recalled that before the 2004 Act which birthed the contributory pension scheme was enacted, pension benefits were paid into the Consolidated Revenue Fund by the Federal Government.
Under the Defined Pension Scheme (old), retirement benefits, consisting of gratuity (a lump sum) and subsequently monthly pension payments are guaranteed to workers for life, with civil servants not directly contributing to their own retirement benefits while in active service.
However, with the enactment of the Pension Act in 2004, and its implementation in 2007, most government workers were transferred to the CPS. While they contribute 5 percent of their salary, the government makes up the remaining 10 percent. The contribution was later increased to 18 percent, with workers paying 6 percent and their employers paying 12 percent.
BH reliably gathered that many public servants, particularly the armed forces, whose employment predate the Pension Reform Act of 2004 were not transferred to the CPS, and are currently drawing their benefits from the old scheme.
Unfortunately, the two pension schemes adopted by the government have been experiencing hiccups leaving retirees at the receiving end. According to sources in government, the hiccups are caused by several factors, including non-availability of funds and the non-remittance of deducted funds to pension managers by the government.
Data obtained by our correspondent shows that the Federal Government is indebted to its retired workers to about N450bn in unpaid benefits. According to the data, while N85bn alone is from unremitted deductions from workers Contributory Pension Scheme (CPS), the rest is from the old Defined Pension Scheme (DPS).
Several sources in the Pension Office who confided in BH put the blame on successive administrations since 2007. According to them, starting from the administration of Late Shehu Yar’Adua in 2007, successive administrations failed to pay about 16 years accrued pension right of civil servants who have been in the service before the new pension scheme commenced.
They claimed that the government, due to the non-availability of funds, only pays accrued pensions of retirees to their PFAs after their retirement.
“What happens is that with the way our new pension laws are structured, PFAs cannot start paying retirees until all their savings are remitted. Even it is it one month that is being owed, they will not pay. Remitted funds must be backed up by employees’ employment and retirement letters.
“For instance, if a worker retires in 2020 after spending 30 years in service, his employer, in this case the Federal Government must pay up his accrued benefits since 1990 when he started work to 2007 when the new pension scheme commenced.
“Deductions for the remaining 13 years (2007 to 2020) are most times not in contention since the Federal Government and I think Lagos State promptly credit their employees’ pension accounts as at when due.
“The problem usually is the accrued benefits which are sourced when the expected beneficiaries retire from service.
“On paper, there is a consolidated account where workers pension should go every month. But we all know the true situation of things in the country. It is tough for government to even pay salaries. Most times, they borrow to be able to pay, while the payment of pension into the designated account is deferred till later”, declared a source in the Pension Office who did not want his identity revealed because he did not have the permission to speak.
While retirees under the CPS are suffering from the non-remittance of their accrued rights, those under the old defined scheme are worse off.
A retired major with the Nigerian Army, Samuel Adepoju, who spoke with our correspondent in Lagos, said it took him over two years to start getting his pension.
According to Adepoju who spent 28 years in the military, those on CPS are better off than those of us on DPS.
“Unlike us that the government must source for our money (benefits) in full after our retirement, those on CPS are only owed like half of their benefits which is easier to source for, as the government had been crediting their pension accounts since the CPS started in 2007”, the retired military officer stated.
Speaking on the development, the General Secretary of the Nigerian Union of Pensioners (NUP), Elder Actor Zal, appealed to the government to ensure the release of their accrued right from 2020 till date.
“We want to appeal to the Federal Government to come to the aid of pensioners who retired under the Contributory Pension Scheme (CPS), because as we speak now, anybody that retires from March 2020 till date cannot access their pension.
“The reason being that the government is yet to pay up the balance of the accrued right to these pensioners and until that is done they cannot access their Retirement Savings Account (RSA). There is no two ways to it.
“The way we are going, the Federal Government is releasing the monthly pension of the contributory pensioners, the accrued right monthly. But the last release made about two weeks ago only covered February 2020. If they release another one now, it will be for March 2020. So, all pensioners on that scheme that fell outside that month will have to wait.
“We are in April 2021. How do you retire and wait for one year before you access your own money that you contributed, simply because the government has not balanced up? That is why we are just appealing to the government to please balance up so that it will be seen that the moment you retire, the following month you begin to enjoy your monthly pension.
“The accrued right came about because when this scheme came up in 2007, some workers have already put in different years of service ranging from 10 to 15 years. Instead of the government allowing the scheme to commence with the people that start their service in that particular year, the government forced some people that were already in service to join the scheme.
“Those people were entitled to some compensation and retirement benefits for the previous years they have spent in service before the scheme kicked off. The government said they will calculate it, work it out and pay it into their account. But since that year, they did not pay until these set of people start retiring and it becomes a serious issue,” the NUP boss lamented.
In her reaction, the Director-General, National Pension Commission (PENCOM), Aisha Umar, disclosed that the challenge to pay retirees which started in 2014 was caused by the appropriation of insufficient amounts.
“It is sad to report that we have today, a large number of Federal Government employees who retired from March 2020 to March 2021 under the Contributory Pension Scheme that are yet to receive pensions due to non-payment of their accrued pension rights.
“This challenge, which started in 2014, was triggered by the appropriation of insufficient amounts for payment of accrued pension rights of federal government retirees and further aggravated by late or non-release of full appropriated amounts.
Apart from these challenges, she also faulted the non-compliance of the Federal Government with the new minimum statutory rate of pension contribution of 18 per cent; non-payment of approved 15 per cent and 33 per cent pension increases to pensioners under the CPS.
“All these have created sad and negative impression on the full realisation of the objectives of the CPS in Nigeria,” the PenCom boss noted.
Meanwhile, the Head of Corporate Communications at PenCom, Mr. Peter Aghahowa, assured retirees that government was determined to settle the backlog owed them.
Aghahowa disclosed that PenCom was clearing the backlog of unpaid pensions as funds are released to it; and noted that PenCom has paid up to the month of February 2020.
While stating that only retired Federal Government workers who were migrated from the old Defined Benefits Scheme to the CPS are being owed, assured, “There is a backlog, but funds are being released by the Federal Government and payments are being made. When the Federal Government release more funds, we will pay.”

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