A nation and its pensioners

A nation and its pensioners

By OBODO EJIRO   
Four months ago, we were shocked by the biazzer drama that played out at the pension probe. When the dust settled, what came through was that we had been fleeced of billions of naira. As if that was not enough, just last week, retirees of the Nigeria Postal Services (NIPOST) shut down major post offices in Lagos and Benin City in protest of non-payment of 3 years pension arrears.
The NIPOST protesters, most of them septuagenarians, vowed to continue with the protest until it became evident that their entitlements would be paid. These are the realities of our day and if we do nothing, those who are gainfully employed today will repeat history in this bad light.
Nigeria has a population of 15 million people (almost equall to the number of people living in Lagos) within the 50-85 years age bracket, not to talk of the 13 million people between the 40-49 years age bracket who will be due for retirement in a few years. Given the structure of the population, there is a growing need to bring pension matters to the fore of national discuss. Dying on a queue, while waiting for entitlements, is not an honour to Nigeria. These recent events have engendered a lot of disillusionment in the pension system.
When BusinessDay conducted a research recently, we sought the opinion of respondents on whether or not they believe they will receive pension benefits at old age and strange enough 19 percent of them said ‘no’. This is alarming because most respondents were drawn from backgrounds that cut across the private and public sector. Surprisingly, they work in companies which employ well over the number required for companies to subscribe to a Pension Fund Administration (PFA).
But though we may have recorded real fraud in the system, not the whole of it embroiled in controversy. Because there are Nigerians who currently enjoy the retirement funds they set aside during their working years. Indeed, Nigeria has achieved some measure of improvement as the country moved away from the old Defined Basic to the Defined Contributory system, in 2004.
Six years after the adoption of the new Pension Act, total pension contribution has grown remarkably to N289.91 billion in 2010, from N60.41 billion in 2006. A 380 percent appreciation. In the same vein, the number of contributors has increased astronomically, today, it stands at 4,542,250. But it is worrisome that less than 12 percent of the working population is involved in pension contributions.
No doubt, the Pension Act has done a lot to sanities the way pension funds are administered in Nigeria. From directing investments to managing the way funds are eventually distributed to retirees, there has been a continuous effort at making the system better. But there are a lot of areas still open for fine-tuning, otherwise these protests by pensioners will not be.
That the system may be better
It is clear that there is a task for all if the pension system is to move forward. On the part of the regulator, there is need to address issues like none remittance of pension contributions by corporations. There is need to address the issues that cause none payment of pensions and gratuities to older citizens like the NIPOST retirees.
There is also need to open up other safe investment ports to PFA (some Pension Funds Administratiors (PFAs) have said the law is somewhat restrictive). Also we must ask why is it that the Act makes little or no provision for Nigerians living abroad who may want to contribute to the retirement scheme in Nigeria. The openness of PFAs as is currently enforced by PenCom is commendable and it should be maintained.
On the part of contributors, there should be effort to make their employers remit contributions. There are cases where employee contributions are not remitted to PFAs when due. It remains the responsibility of the regulator to enforce the relevant sanctions of the pension Act on defaulting employers. It is the sole responsibility of PFAs to ensure that they use the funds of these Nigerians who go the extra mile to save, wisely.
On the part of government, those who steal pensioners’ funds should be punished. PenCom says that companies are complying but it is often when they need to get something from government that some of them go the extra mile to meet all the provisions of the law. This should not be the case.
Source: BUSINESSDAY