Still A Nest Of Corruption
Even when they were assured that the new pension scheme would provide solution to the age long problem of delay in getting their entitlement after retirement, most of them accepted it with a pinch of salt. Pa Emmanuel Olatunji, a pensioner told this magazine in an emotion laden voice that one year after retiring from one of the federal ministries, his pension and gratuity have not been paid. “I least expected that this would be my fate after all the talk that the contributory pension scheme will save us from the misery those before us experienced,” he lamented.
Before his retirement, Pa Olatunji was told to send his details to the Nigerian Pension Commission, PENCOM. That was where it ended. Even though he had complied with the directive, his pension managers were yet to pay him his gratuity and pension arrears. He said the non-payment of his pension has made life unbearable for him. Another pensioner, Apeh Onuche said he depends wholly on his children to survive.
Compared to another retiree, Pa Olatunji and Onuche were lucky; they are alive to tell their story. A pensioner who served with the Nigerian Prisons Service in Markudi, Benue State for 37 years died in 2009, while still waiting for his gratuity. His son, who does not want his name in print, told this magazine his father’s former employers, the Prisons, Immigration, Customs and Civil Defense Pension Board wanted to frustrate him from collecting his father’s entitlements. The deceased was owed six months pension arrears and other entitlements before his death.
While the nation’s senior citizens were groaning in pain, the pension mangers and officials of the pension’s board were smiling to the banks. The Economic and Financial Crimes Commission, EFCC, recently discovered a whopping N12.86 billion in the bank account of Dr. Suleiman Shuaibu, a director, and Mrs. Phina Chidi, a deputy director in the finance and account department of the pension unit, Office the Head of Civil Service of the Federation. Another N800 million was said to have been found in Mrs. Chidi’s account. In what looks like a classical show of primitive accumulation of wealth, N2 billion suspected to be stolen from the pension fund was found in the residence of a top government official. About 40 persons are being prosecuted by the EFCC for allegedly pilfering pensioners’ money.
A combined team of the EFCC operatives and Presidential Task Force on Pension Reform have recovered about N35 billion and N15 billion worth of property from corrupt official in the head of service pension department. The taskforce was constituted in 2010 following reported cases of pension abuse by pension managers and officials of pension office. Abdulrasheed Maina, chairman of the taskforce, disclosed that about N151 billion of embezzled funds and assets of the federal government has been recovered since the team was inaugurated. Curiously, most of the recoveries were made at the pension office of the Head of Service of the Federation.
Since the introduction of the contributory pension scheme in 2004, shoddy deals have become the order of the day among both government officials and their private sector counterparts in the administration of pension funds.
One of the clever ways of defrauding the nation of huge sums of money by a cartel in the pension office is the inflation of the names of pensioners. Maina said that his team comprising personnel from the EFCC, Independent Corrupt Practices and other related offenses Commission, ICPC, the Nigerian Immigration Service and other relevant agencies has discovered about 71,333 ghost pensioners. Before the adoption of e-payment system in the pension payment, the nation spent N5 billion to pay the pension of the listed 258,000 pensioners monthly. This figure, however, came down to N1.7 billion after 70,657 pensioners were discovered as actual figure. The chairman disclosed that 44,320 retirees were discovered not to have received their pension payment between 1968 and 1975. Besides, 66 fake accounts were discovered and another 555 accounts uncovered being operated in the name of an individual. At the police pension office, pension payment was reduced from an inflated N1.5 billion to N5 million.
The plight of the pensioners has attracted the attention of the nation’s Senate. The law making body recently instituted a joint committee on Establishment and Public Service and States and Local Government Administration, to conduct public hearing on the abuse of the pension scheme. In order to give members of the public and pensioners opportunity to present their case, the committee resolved to conduct public hearings in the six geopolitical zones of the country. The public hearing which will last between February 6 and March 2, will hold in Lagos, Enugu, Makurdi, Gombe, Kaduna and Abuja. So far, about 194 petitions and 11 memoranda have been received from Abuja alone.
Senator Alloysius Etok, chairman of the committee, said the aim is to institutionalise prompt payment of pension through appropriate legislation. “We are set to address the agony and plight of pensioners who have worked hard for this country. They cannot be subjected to misery, suffering and despair. We will address the grievances, complaints and observations and proffer solution." He said.
Last week, at the committee’s zonal hearing in Lagos, Mrs. Modupe Oguntuase, Lagos State commissioner for establishment, training and pensions, said the federal government owes the state N11 billion arrears for pensioners and gratuities accrued from payments made to Lagos State retirees from 1999 to May 2002.
Secretary-general, Nigerian Union of Pensioners, NUP, Comrade Actor Zal declined comment on the issue for now.
Under the contributory pension scheme, entitlements and benefits for retired workers commence only a month after retirement. The scheme was introduced in 2004, to solve the problem of delayed or non-payment of pension to retired workers. Under the new scheme, public and private sector employees, whose employers subscribed to the new scheme, have a certain percentage of their salaries deducted each month along with equal contribution from their employers. This is paid into their account through their chosen pension account managers.
Upon retirement, the contributory amount and the accumulated benefits under the old pension scheme, which are still in the custody of PENCOM, are released to the pension managers. The accumulated amount and contribution are joined to form the pensioner’s benefits.
PENCOM is to be the regulatory authority to oversee the activities of all registered Pension Fund Administrators, PFAs. Opposition to the scheme centred on antecedents of endemic corruption both within the public and private sectors. The scheme was borrowed from advanced societies, where life expectancy is 76 years. Unfortunately, life expectancy in Nigeria is below 50.
Investigation has revealed the scheme had worked smoothly since 2004 till September last year. Those who retired from the service since October 2010 are finding it difficult getting their benefits.
Again, under the scheme, employees choose their PFAs but because of vested interest, some employers allegedly compel their workers to patronise PFAs where they have business interest. Some PFAs also complain of non-remittance of the expected seven per cent employers’ contribution to the scheme.
There are fears that the retirees’ benefits might have been trapped in some distressed banks. Pension managers were also said to have used part of the contributions to buy shares but could not recover the funds before there was a crash in the price of shares on the floor of the Nigeria Stock Exchange, NSE.