Prior to the establishment of PTAD, the management of the Defined Benefits Scheme (DBS), also known as the ‘Old Pension Scheme’, had a very bad reputation. But the narrative has since changed with works done in the last eight years of the former administration saving billions of naira. In this report by Omobola Tolu-Kusimo, pensioners have set the agenda for the new administration.
The old pension scheme was plagued with challenges with over 50,000 complaints inherited by the Pension Transitional Arrangement Directorate (PTAD) from the Office of the Head of the Civil Service at the time of its establishment in 2013, reports have shown.
Over 30,000 qualified pensioners were not on payroll while more than 50,000 ghost pensioners were on the payroll.
At inception, PTAD inherited 268,897 pensioners on the payrolls of the old pension offices
As at last December, PTAD’s payroll stood at 226,693 after a lot of cleansing, elimination of ghost pensioners and addition of eligible pensioners hitherto not on payroll with a total of N754 billion in monthly pensions paid from January 2015 to last December.
Overall, the directorate has saved billions of naira from the money paid to over 50,000 ghost pensioners.
Pension Reforms
If there is any shining light on the performance of the last administration, it is the way it takes care of retired persons.
At present, the administration of pension on pensioners who retired before 2007 and under the Defined Benefit Scheme (DBS) has created a new dimension to Nigeria’s pension system.
Prior to PTAD, the management of the DBS, also known as the ‘old pension scheme’, had a very bad reputation.
The government was flooded with allegations of misappropriation of pension funds, neglect of pensioner’s welfare, and other malfeasance. The public outcry led to widely publicised public hearings and criminal proceedings against suspected pension thieves.
Before then, pensioners suffered to get their pensions, and there were reports of pensioners sleeping under staircases and on floors of pension offices. Verification was hard on pensioners and many suffered from the stress of crowds, queuing for long hours, among others.
Many pensioners did not receive their monthly pensions promptly while others were owed years of pension arrears and gratuity. Similarly, many Next-of-Kins (NOKs) of deceased pensioners had not been paid death benefits for years, some up to 10 years or more, after the death of the officer.
In some cases, pensioners had to pay to get their pensions or arrears. And there was anger in the land as pensioners invaded the offices of the Head of Service of the Federation(HOCSF), and other related staff members in Abuja, over the non-payment of pensions who attacked and beat up legislators.
Against this backdrop, PTAD was established in August 2013 to consolidate and manage pensions under the DBS for pensioners who would not transit into the Contributory Pension Scheme (CPS) introduced in 2004 during the pension reform. PTAD, an agency of the Federal Government is regulated by the National Pension Commission (PenCom) and established in compliance with the provisions of the Pension Reform Act of 2004, repealed and re-enacted in 2014, which provides the agency the power to consolidate old pension’s offices.
Thus, the Directorate inherited complex pension schemes that were mismanaged and did not have reliable data or information.
The Directorate categorised pensioners in the old scheme under Parastatals Pension Department (PaPD), Police Pension Department (PPD), Civil Service Pension Department (CSPD) and Customs Immigration and Prisons Pension Department (CIPPD).
Key regulatory challenges at inception
The Executive Secretary, Dr. Chioma Ejikeme, in a presentation entitled: “The New Narrative for Pension Administration for the DBS” at this year’s Stakeholders Engagement, Southeast Zone said over 50,000 complaints were inherited by PTAD from the Office of the Head of the Civil Service while over 30,000 qualified pensioners were not on the payroll.
She stated that before they took over the administration of the old scheme, there was no clear way for pensioners to get their complaints addressed which made so many pensioners give up on the Federal Government.
She said: “PTAD also inherited unfunded liabilities, 33 per cent pension arrears; gratuity and death benefits; disorganised, error-prone manual computation/calculation of pension benefits; lack of adequate/appropriate office space to accommodate walk-in pensioners; inadequate staffing of offices and provision of appropriate technology work tools; poor pension file management leading to damaged records and lost hope; and rude and unruly behaved pensioners”, she noted.
Changing the narrative
Indeed, pensioners had gory tales on their experiences in the past.
But PTAD has changed the narrative with the same pensioners telling sweet stories and singing good melodies about the recent pension administration.
Ejikeme said PTAD has sanitised the DBS with major achievements to showcase over the last nine years with consolidation of old pension offices, payroll due diligence, on-boarding process to PTAD pension payroll, and determination of inherited liabilities.
She further stated that the success is not just the result of deploying information technology, more critically; it has been a result of political will and strong support from the administration and key stakeholders, including strategic and strong leadership at PTAD.
“The narrative has changed due to efficient and effective deployment of available resources and human capital, and the investment in human capital development; creativity, initiative, passion, commitment and empathy of PTAD management and staff; and collaboration and support from pensioners and their union representatives.
“We have worked hard to address challenges and transform the management of the DBS in several significant ways that include management of pensioners’ files and records, validation of pensioners computation and calculation of pension benefits; management of the monthly pension payroll; resolution of pensioners’ complaints; and settlement and payment of 33 per cent pension arrears, death benefits, among others.
“Prior to PTAD, verification was hard on pensioners, and most importantly, there was no database for pensioners after those rigorous and harrowing verification exercises. Verification was held in one or very few centers, making the process long and tedious. Pensioners suffered from the stress of large crowds, queuing for long hours under the scorching sun, with some dying before they are able to access their pension. This was the nightmare of every pensioner at the time in the country.
She continued: “There were no facilities like canopies, chairs, refreshments, or conveniences which became the norm since the inception of PTAD. In the last close to Ten years, PTAD created a field verification process that respects the dignity of senior citizens, multiple verification centers were used so that crowds would not be too large. A simple four-step process from arrival to completion of verification, to minimize stress was created. All of these were done in a conducive environment inside event centers or halls fully air-conditioned with chairs and tables for pensioners to sit. They were served lunch and water. There were also provisions of wheelchairs and Stand-by Ambulances or First Aid, at centres.
“We deployed mobile verification to ensure no qualified pensioners are left uncaptured. Pensioners that were aged, infirm, sick, or physically challenged were also captured by sending mobile teams to pensioners’ homes, in hospitals among others. Based on this, PTAD Mobile Teams have visited over 80 different cities, towns and villages, and countless hospitals across the entire nation, including every state capital”, she added.
Journey So Far
Reminiscing on the journey so far, the ES stated that PTAD’s determination to change the narrative as far as pension administration under the DBS in Nigeria is concerned is irrevocable.
“It is pertinent to note that PTAD has intentionally and consistently been working on achieving positive and sustainable change in the DBS pension management for the almost 10 years of its operation. It is worth mentioning that PTAD would be ten by August 2023.
“The hard work of PTAD over the years is now paying off. But the enormity of the challenges inherited by PTAD at inception and the sheer volume of overhaul that PTAD has had to carry out, in order to get to where it is today cannot be overemphasised.
“Our journey from field verifications, and mobile verifications, to putting together a solid database of pensioners, benefit computation, ensuring the regular payment of monthly pensions and paying long overdue pension arrears to pensioners, has been a progressive one filled with creativity, dedication, commitment, persistence and resulting in milestone achievements. It is not yet a perfect situation, but PTAD is committed to continuing to make giant strides”.
Scorecard
The ES added: “Since our last stakeholder’s forum for the South-East in Enugu, Enugu State in January 2022, PTAD has carried out a series of activities. We have completed payment of arrears arising as a result of the consequential adjustment to pensions as a result of the increase in the minimum wage of April 2019 to the four operational departments in the Directorate; completed liquidation of the 126 months outstanding liabilities due to ex-workers of Nigeria Reinsurance Corporation; and completed payment of the 219 months of inherited liabilities to ex-workers of New Nigeria Newspaper Limited.
“We also completed payment of the 100 months of inherited liabilities to ex-workers of NICON Insurance; completed payment of the 96 months of inherited liabilities to ex-workers of Delta Steel Company (DSC); implemented the 9.7 per cent increment to Ex-PHCN workers with attendant arrears paid; made payment of a total of 48 months of the 84 months inherited arrears owed NITEL/MTEL pensioners, leaving a balance of 36 months for complete liquidation. With these payments, we are glad to inform you that PTAD has completely liquidated the inherited unfunded liabilities of all the Defunct/Privatized Agencies handed over to PTAD in 2017, with the exception of NITEL/MTEL with a balance of 36 months, which we are fully committed to liquidating.
“Recently, we commissioned a mechanized filing system, put in place to safely store pensioners’ physical verification and departmental files. Apart from securing and archiving these documents, this device will make it faster and easier to recall pensioners’ files to reconcile and resolve any complaint”.
According to the ES, the Directorate received £26.5m repatriated pension funds from the United Kingdom in 2021 while it also fully recovered pension assets with insurance underwriters.
Dr. Ejikeme said the pension assets were recovered from insurance underwriters namely AIICO Insurance Plc, and African Alliance Insurance PLC.
She pointed out that the icing on the cake was the receipt of the repatriated sum of £26,505,862.97 from the United Kingdom, which was pension funds under investment with Crown Agents Investment Management Limited, United Kingdom.
She revealed that the funds were used to settle part of the accrued arrears owed to its pensioners from the defunct agencies with Mr Presidenr’s approval worth over N120 billion.
She further disclosed that the Government, under the auspices of the Federal Ministry of Health established a Ministerial committee to look into the issue of providing Health Insurance for senior citizens in the country.
“PTAD and representatives of the Nigerian Union of Pensioners (NUP) were members of this Committee. This initiative has yielded positive results as PTAD has reached an advanced stage with consultations with the National Health Insurance Authority for the commencement of Health Insurance for our pensioners”.
Ghost Pensioners
The Directorate has eliminated over 50,000 ghost pensioners that were collecting pensions illegally, with 20,000 from within Federal Government’s parastatal agencies alone.
PTAD Director, Parastatals Pension Department (PaPD), Mr. Kabiru Yusuf on his part noted that ghost pensioners have been eliminated from the system.
He said they carried out two major removals of ineligible people from the payroll of parastatal pensioners.
“The first one was done in 2019 when we did an assignment with the Nigerian Interbank Settlement System to ascertain people who have valid BVN and those who do not. When we did the exercise, we removed 5,834 people from the payroll. The monthly pension implication of the people removed is N287.8 million. When we did the removal, we created a complaint resolution channel for those who have genuine BVN to send their complaints to us. After the complaints came in, those that we have restored back on payroll from 2019 to date are 2,902 and we paid them N175.8 million and this is the savings we have made from paying pensions to those who do not have valid documentations but continue to be on payroll.
“The second removal that we did was done in October 2020. We started our verification for parastatal in April of 2019 and finished in November 2019. The Executive Secretary later gave six to 10 months moratorium for people who do not have the opportunity to come for the verification so that they can come to our offices to get it done. When the moratorium lapse in October 2020, we compared the payroll to the database of the verified pensioners. We were able to remove people who are on payroll but not verified numbering 20,191 from the payroll. The monthly pension implication of this is N741 million.
“As at date, only 4947 have complained and were restored to payroll. So, if you are looking for real evidence of people who have been on the payroll before PTAD was establish and were collecting pension that they are not qualified or eligible to take, this is the evidence. In essence, 15,194 ineligible people were put on the payroll and were collecting pension for no just cause. These are the ‘ghost pensioners.
“Ultimately, this is a savings of almost half a billion naira per month when you do a rough calculation of N741 million from N289 million. So, PTAD is saving over N452 million monthly from October 2020 till date. We also saved huge billions by removing many pensioners who have died but their beneficiaries were still fraudulently receiving their pension”.
Kabiru farther disclosed that other departments such as Police Pension, Civil Service Pension and Customs Immigration and Prisons Pension have also eliminated ghost pensioners and saved billions of naira too.
Pensioner Verification
Kabir pointed out that PTAD inherited 268,897 pensioners on the payrolls of the old pension offices at inception. Through verification, PTAD has created a centralized database, complete with pensioners’ personal information, biometrics, and career documents. The database is the first of its kind in DBS history and as such its integrity is paramount.
“As of December 2022, inherited payrolls by PTAD stand at 226,693. This means that the number of existing DBS pensioners in the country managed by PTAD is 226, 693 and they receive N9.113 billion as monthly pension. The pensioners as compiled by the Directorate comprise 11,375 pensioners under the Customs Immigration and Prisons Pension Department (CIPPD) department; 15,716 pensioners under Police Pension Department (PPD); 104,919 pensioners under Civil Service Pension Department (CSPD) and 94,683 pensioners under Parastatals Pension Department (PaPD).
“Overall, we have paid an estimated total of N754 billion in monthly pensions from January 2015 to December 2022”, he said.
Future Plans
Speaking on future plans, Dr. Ejikeme said they are working assiduously towards completing their “I AM ALIVE Confirmation” solution for database cleanup.
“Launched April 2023, so far 50,553 have been confirmed, “Alive”. We are continuously sensitizing our pensioners who are alive to make sure they take part in this all important exercise which will determine a pensioner’s eligibility to continue to receive pensions. We plan to further improve the welfare of our pensioners, including access to health insurance for pensioners, increased coverage across Nigeria, and open more State Offices.
“Harmonization of pensions will continue to be part of our priority to enable pensioners who retired on the same grade level and step under the same organization at different years to earn a unified pension for equity. We will also implement the constitutional provision of five yearly pension increments due in 2024, among others”.
Stakeholders Perspective
With respect to the administration of pensions under the DBS, pension reform has been a success, the National President, Nigeria Union of Pensioners (NUP), Comrade Godwin Ikechukwu Abumisi said.
According to him, pensioners have never had it as good as they did under the last administration.
He stated that PTAD paid them their monthly pension and paid adjustments arising from increases in salary particularly from increases as a result of the 2019 minimum wage.
“We are very grateful and happy with PTAD. Some Nigerians say so many things about former President Buhari wrongly. But we pensioners are very happy with him because he took care of us. We are hoping that the incoming administration of President Tinubu will also do as much as he has done for us and even better. We are optimistic because while he was governor of Lagos state, he took very good care of pensioners”.
Speaking specifically on what they look forward to, he said: “First of all, we want President Tinubu to continue payment of monthly pension as at when due. Secondly, we want him to address the remaining backlog of gratuities and pay. Thirdly, we want him to sit back and think about the position of state governors who don’t pay pensions. The problem we have with the payment of pension in Nigeria is that state governors don’t pay. Many of them are owing about 27 months’ arrears of monthly pension. That is more than two years. They don’t care about the pensioners. Their position is that pensioners are deadwood and we are not deadwood. We are alive. We want the President Tinubu to look at this.
“If you look at the constitution of the Federal Republic of Nigeria, it is the sole responsibility of the federal government to handle pension just as it has for the army and police. But sometimes the state governments say the federal legislatures cannot legislate for them on pension. But that is what the law says. Since the federal government has sole responsibility for pension, it should be in a position to take measures to whip the state governors into line to begin to pay pensions. It is not good that people who served in this country when they were strong are denied benefits when they retire as senior citizens.
“And you say to yourself, how much is this pension? There are some pensioners whose take home pension is only N5,000, yet state governors cannot pay. I don’t know whether I would call it hatred for pensioners. but I know that many of them are praying to advance to old age, yet they cannot treat the aged well”.
Accessing the personalities of those at the helms of affairs at PenCom and PTAD, the NUP President said both women appointed by the former President have done creditably.
“The Director General of PenCom, Mrs. Aisha Dahir is a fine lady and has performed credibly well. She has the intellectual capacity to understand the problems of PENCOM. The same goes for the Executive Secretary of PTAD, Dr. Chioma Ejikeme. She has been very pleasant and wonderful in addressing each pensioner’s problem. She brought us out of Egypt into the Promised Land.
“We want the Executive Secretary to continue with the progress she has made in the payment of DBS. we will be happy if the new president reappoints her to her position because pension is delicate and only special people who will not succumb to the ills of this world should be at the helms of affairs of managing pension”, he added.
Speaking from the Northwest, NUP Vice President, Northwest, Mohammed Abba Dakande on his part said since the coming of PTAD, they have found an agency that interacted with them in love.
“PTAD is doing their best to see that all that has to do with pension under the old scheme is in order. The have eliminated fraud in the system. Issues of verification have been simplified such that those who cannot attend because they are either too old or feeble are visited in their locality by the agency.
“PTAD staff travel long kilometers to meet pensioners for verification unlike in the past when we are the ones that travel to meet government agencies in charge of pension”.
The National Vice President, Southwest, NUP, Elder Ayo Kumapayi describe the immediate past president as the most pension friendly president.
“He is the only president that adhered fully to the constitution as it affects pensioners by way of reviewing pension every five years or at any time when wages are increased. He did it consistently and by the time he left he did not owe federal civil servant of state pension any federal share of pension. There was a time when NUP made move to give him a special Award for his performance on pension but unfortunately, he couldn’t grant the opportunity before he left.
“The two women at the helm of pension affairs in person of Mrs. Aisha Dahir-Umar and Dr. Chioma Ejikeme have been so efficient and so friendly in the matters of pensioners in this country. Dr. Ejikeme has been so hard-working, making sure that all the pensioners have the opportunity of getting what they deserve. For instance, we are aware that she is working on the harmonization of pensions in the country which is what we have been fighting for several years. She has made proposal to the present administration for the harmonisation.
“What do we mean by harmonization? Let me give you an example of Inspector-Generals of police who retired having same number of years of service and same grade level. One is earning about N200,000 per month while the other one is earning about N500,000. What the harmonization will do is to bridge the gap by correcting the structure. This is something that NUP have agitated for quite a long time, We have retired permanent secretaries who are earning N27,000 pension per month whereas we have retired permanent secretary on the same level, same step and same number of years of service earning N500,000 per month. The Executive Secretary has started the process and we are vert happy. She is also working on pension review. The last exercise was done four years ago and it will be due again in 2024 and she has commenced the process with the income and wages commission for the review to happen. So, generally I will say that federal pensioners have never had it so good under PTAD”.
Speaking of their expectations of the new administration, he said: “We are looking forward to President Tinubu’s administration. We believe he will be pension friendly too. He should do everything within his power to improve on the welfare of pensioners in the country. We are not asking for too much. We are senior citizens. We used the best time of our life serving this country and we should be rewarded.
“I think our founding fathers knew the importance of pensioners in the country when they were writing the constitution. This is why they factored into the constitution that pensions should be reviewed every 5 years or at any time wages are increased. It is however unfortunate that almost all state governors don’t adhere to the constitution on pension matters. This is why we still have pensioners receiving N1000 for the past 10 years which should not be so”, he stressed.
