By Ademola Adebisi
There was a time, when there was a country, though brief, that retirement from the Nigerian public service was fascinating and post retirement life was enviably worth living. That time was indeed an obvious contradistinction of the contemporary trends in which retirement is dreadful and post retirement life depressing, anguishing, regretful and short. I recall in 1991 when my father decided to proceed on voluntary retirement from service, after he had given the appropriate notice of voluntary retirement, his papers were processed and a month to his exit, he collected his gratuity cheque and the very month that followed his exit, he started to earn his pension. Today, my father’s story as sententiously told here, will sound like a tale from the moon or a fiction amidst the tales of woes which now bedevil pension processing and payment in the Nigerian public service-federal, state and local government services.
In a contrasting instance, a sister who retired in 2016 under a pension scheme that was contrived to make pension payment more efficient and thereby make post retirement life much more blissful for retirees, has not only received a dime as at the time of writing this piece, but also has no hope of when to be paid.
Two major pension schemes have been in praxis in the Nigerian public service namely, the Defined Benefits (non-contributory) Pension Scheme (DBPS) and Contributory Pension Scheme (CPS) each prevailing at different times, but with the former first predominating. Under the DBPS, the employers wholly fund workers retirement benefits in the forms of pension and gratuity, while under the CPS, employees and the employers are responsible for the funding of the retirement savings accounts at different rates. When the DBPS prevailed, due to factors of bad economy, poor manpower planning, mismanagement and bureaucratic corruption pension woes began to mount. Indeed, by the time Nigeria returned to democracy in 1999, the federal government was owing pensioners several billions of naira in pension arrears. The states and local governments did not fare better. Consequently, pensioners were labouring heavily under delay or outright non-payment of gratuity and pensions, resulting in sufferings and untimely death of retirees across the country. It was against this backdrop that the Obasanjo administration enacted the Pension Reform Act 2004 which culminated in the birth of the current contributory pension scheme.
The CPS was introduced on the assumption that, since every employee will have a retirement savings account that it is going to be funded by both the employer and employee, initially at the rate of 7.5% apiece, an employee is certain of not only knowing how much will accrue to him or her upon retirement, he or she is sure of receiving his or her retirement benefits without much ado. When the Act was in the legislative mill, a section of workers then saw this as the resurrection of the failed provident fund introduced in the 60s in the private sector, but dressed in another garb and thus had their reservations. However, the success of CPS in other climes and government’s promise of commitment to make it a lasting panacea to pensioners’ woes swayed many into reluctant submission. Surprisingly, perhaps not to those who were cynical about it ab initio, the scheme is far from alleviating the sufferings of pensioners so far.
Axed into the specific, pensioners under the scheme still experience the following: one, delay payment. It is unbelievable that under the scheme that, pensioners are still being owed by governments for several months and years. Two, compared to the defined benefits scheme, the pension entitlement of retirees are barely sufficient for them to survive. Although, the Act in order to avoid penury, provides that withdrawal of lump sum should not leave a pensioner with less than 50% of his salary while in service. In reality, that is hardly the case. In order to boost the retirement savings, government in 2014 raised employers’ contribution to 10% and employees’ contribution to 8%. Sadly, no level of government has complied with that amendment. Yet inflation at double digits all the times, keep on eroding the purchasing power of the pensioners, thereby denying them access to good life and happiness in retirement. Though there is provision for annuity, but that the pension vault is exhaustible after the probable year of death, portends it a scheme without the future guaranteed. More disheartening is the fact that, in most states where pensioners are treated with disdain, their governors still deem it imperative to approve humongous pensions and embarrassing severance package for themselves.
The situation looks pathetic and hopeless if we examine the root causes of this pitiable plight of pensioners and which ought to form the basis of genuine future pension reforms, which seem an impossibility. First is that, successive government at all levels, have not accorded payment of pensions a priority. Retirees are seen to be out of sight and as such are to be kept out of the mind of the government in power. Their entitlements become more vulnerable for lack of very strong union to mount potent pressure on government to be paying regularly. Though pensioners do have their unions, however, the unions are as feeble as the pensioners’ bones. Another challenge is non-remittance of pension deductions to the retirement savings accounts by governments. This is equally an indication of governments’ lackadaisical attitude to pension matters. Instead of funding workers’ RSAs, their deductions are diverted to other things. Retirement savings accounts are hardly safe! Sad still, not even the workers’ contributions are paid into their RSAs. Another practice is that, governments do borrow from pension contributions to execute public projects or invest in infrastructures, only for governments to default and thus find it difficult to pay pensioners as and when due.
Bureaucratic corruption is another factor that has been tormenting pensions and pensioners. Cases of outright stealing of pension funds abound across the country; and worse still, in states still operating defined benefits scheme, serving public servants do demand a slice of pensioners benefits (10% bribe) to fast track the payment of their pensions and gratuities. The cumulative effects of all these are sufferings and undeserved death of many pensioners.
The panacea to the pangs of the mass of the pensioners as at present seems to lie very much in moral persuasion of the political leaders to have empathy for the retirees, by ensuring good governance which entails promoting the greatest happiness of the greatest number including the retirees. It is just morally correct that, if the political class appreciates the need for them to live a good life after their tenures of office by enacting huge pensions and meaty severance package for themselves and also ensure payment, they should not treat pensioners with disdain like a governor callously quipped to the plea of some pensioners for the payment of their pensions thus: “don’t you have children to take care of you?” Also, there is the need for government at all levels to step up the anti-corruption war much more vigorously. Serving public servants are needed to be brought to the ethical realisation that, stealing public funds and pension amounts to destroying their future and that of the pensioners. Beyond this, it appears we have also reached the juncture where government should, apart from farming and the medical and law professions, constitutionally permit public servants to engage in part-time jobs-freelance jobs, adjunct and visiting teaching, and consultancy jobs, which can be done even from the comfort of their homes to augment their incomes and thus mitigate bureaucratic corruption including the theft of pension funds.
- Dr. Adebisi writes from the Federal College of Agriculture, Akure, Ondo State.
Leave a Reply