The Nation Newspaper

Tag: gratuity

  • Lagos workers to get gratuity three months after retirement

    The Lagos State Government is to introduce an efficient pension scheme for its workforce, an official said yesterday.

    Under the new regime, retirees will be paid their gratuity (lump sum) within three months after retirement.

    Lagos State Pension Commission (LASPEC) Director-General Mrs Folashade Onanuga told the News Agency of Nigeria (NAN) that the administration would soon unveil the new regime.

    “Governor Akinwunmi Ambode is working towards a three-month gratuity collection regime. He is working towards a regime that all pensioners will be able to access their gratuities within three months after retirement,” she said.

    Onanuga also said that the governor was committed to the welfare of retirees as he had cleared the backlog of pensions.

    She said: “Ambode is fully committed to retirees’ welfare as he is working towards clearing pension backlog the administration inherited under the old pension scheme known as Defined Benefit Scheme (DBS) before the Contributory Pension Scheme (CPS) was    introduced in 2004. He has cleared the pension backlog up till 2015.

    “About N37 billion has been released by the governor for 9, 045 retirees since he assumed office.”

    The director-general, however, has advised retiring workers in the employ of the state government to study the two options available to them at retirement carefully before taking decisions.

    According to her, the two options are Programmed Withdrawal and Annuity.

    “The retirement options should be studied carefully before signing any deal with Pension Fund Administrators (PFAs).’’

    Onanuga, who described some PFAs as hoodwinkers, said they had been deceiving retiring employees into taking wrong decision for their own selfish reasons.

    “There are still pension `fraudsters’ parading themselves as PFAs and the Lagos State Government will put concrete measures in place to ensure that its retirees do not fall victims.

    “It is important to note that pension fraudsters are still out there, retirees must be vigilant and courageous not to sign negative deals; be wise,’’ Onanuga warned.

  • Osun govt releases N1.2b for gratuity

    Osun govt releases N1.2b for gratuity

    The Osun State government has released N1 billion to 142 beneficiaries of the contributory pension scheme and N200 million to settle part of outstanding gratuities of 2011/2012 retirees.

    The state has notified retirees from councils, elementary and middle schools that their entitlements will be settled from next Monday.

    In a statement by the governor’s Media Adviser, Mr Sola Fasure, after the weekly Executive Council (Exco) meeting in Osogbo, the capital, the council said bond certificates would be presented to retirees  selected on a “first come, first serve” basis, beginning from January 2 to May 4, 2016.

    The statement reads: “Council received a report that N1 billion had been released to 142 beneficiaries of Contributory Pension Scheme by the state government. These are 100 high school teachers, 30 retirees from Ministries, Departments and Agencies (MDAs) of government and 12 from corporations.

    “Bond certificates will be presented to the beneficiaries in two weeks as beneficiaries are selected on a ‘first come, first served’ basis, beginning from January 2 to May 4, 2016.

    “The state government has also released N200 million to settle part of the outstanding gratuities of 2011/2012 retirees while the 2,006 beneficiaries will each receive N100,000, also on ‘first come, first served’ basis

    “These beneficiaries consist of 108 high school teachers, 704 civil servants and 501 from corporations as payment will begin on Monday, February 26.

    “The council also notify all retirees from local governments, elementary schools and middle schools that they will have their entitlements settled by instalments as from Monday, February 26, while the beneficiaries will as well be selected on ‘first come, first served’ basis as the list of beneficiaries will be displayed on notice boards at the Ministry of Information and Strategy and Local Government Pensions Board.”

    The statement said the Exco debunked insinuations that the state was charging “school fees”.

    It said maintenance levies were being charged only in state-of-the art elementary, middle and high schools.

     

  • Another look at gratuity under contributory pensions

    Another look at gratuity under contributory pensions

    There is no gainsaying that pension fund administration and its laws in Nigeria has over the years since its introduction undergone several reforms and even repeals of parts of its legislations for the improvement of the pension administration and welfare of the Nigeria pensioner. Up to June 2004, the pension scheme in Nigeria was the Defined Benefit Scheme, which was non-contributory by the employee and where benefits were predetermined. These are in the forms of payment of lump sum referred to as gratuity and monthly pension payments guaranteed for life. The rate of payment of both gratuity and monthly pension are dependent on the number of years of service of the employee. Under this pension scheme, there are many sad and agonizing stories of pensioners not receiving their proper pension entitlements as and when due. The pension fund was not properly managed and abuse of the fund rampant. Pension payments were not regular with many months and years of arrears and in some cases never made.

    Because of the problems associated with the Defined Benefit Pension Scheme, the federal government developed a new pension scheme which took effect from July 2004. Known as the Contributory Pension Scheme, both the employer and employee contribute certain percentages of the basic salary, housing and transport allowances of the employee to the pension fund on monthly basis. The fund is managed by a tripartite body: the Pension Fund Administrator, the Pension Fund Custodian and the National Pension Commission, which is the regulatory body. This tripartite arrangement is an endeavour to overcome the problems associated with the old pension scheme.

    My focus here is on the payment arrangement under the Contributory Pension Scheme. The arrangement ensures that on retirement, one cannot be paid his/her full gratuity but can only withdraw a lump sum of money provided the balance in this Retirement Savings Account after this withdrawal would ensure payment of 50% of last salary, as at date of retirement, on a monthly basis for the rest of the estimated life span (which is estimated to be 15 years, after that the pensioner should have died) or purchase an annuity with an insurance company, which will entitle the pensioner to be given monthly or quarterly pension payments for the rest of his/her life, ceteris paribus (all things being equal) which is hard to come by in Nigeria. The retiree has no liberty to decide what amount should be paid to him/her as gratuity, yet this is what he/she has worked for and saved during his/her active years of life, for later use when no more in the service of government and when old age is starring him/her in the face.

    Secondly, the balance of money in the Retirement Saving Account is unilaterally invested by the Pension Fund Administrator again without his/her input on the investment decision, so also in the sharing of the proceeds of the investments. The Pension Fund Administrator invests the pension fund and earns interest of over 20% on monthly/quarterly basis and pays only 3-6% of the interest into the Retirement Savings Account of the pensioner. This is exploitative injustice.

    The implication here is that after spending all of one’s useful life span serving the government, the individual cannot still be able to manage his/her finances, so the government through its agencies has to decide for him/her. This is indeed unfortunate, absurd and abuse of the employee/pensioner competences.The government is thus crying more than the bereaved all because it wants to continually manipulate and exploit the finances of its employees/pensioners to its own benefits using its bureaucrats who seem not to remember that one day they will also retire and join the pension bandwagon.

    Thirdly, pension legislations are made without input from the labour unions which represents the worker and pensioner.

    There have been revelations of multi-billion naira pension fund scandals at the various pension units/departments across the federation just as the governments at all levels have not done much to stem the tide. The rate of payment of gratuity either partly or wholly should be optional to the retiree. The government should allow him/her to decide and then be ready to bear any consequence thereafter without resorting to the government again. The rule should be made very clear. The government should not group all retirees on the same platform – that they would not have the ability and discipline to manage their finances effectively over a long period of time as it is being assumed.

    One of the reasons for the craze for corruption in the civil and public service of the nation is the lack of sense of security for civil and public officers after their retirement from service. Hence, most of the workers have to steal to secure their future. If a worker is sure that if he/she retires clean from service without indictment, he/she will be paid his/her full entitlement or in the alternative, if he/she is found guilty of any illegal financial dealings while in service, he/she would forfeit the proceeds of such dealings and any asset identified thereto and besides would also lose his/her retirement benefits and pension for life, this would help to reduce corruption in the civil and public service. The National Assembly should consider and make a law to this effect.

    All well-meaning Nigerians, workers, pensioners, opinion leaders, business moguls, civil society advocates, champions of human rights and justice and the political class should wake up and not keep silent any longer and speak to protect the Nigeria pensioner and by extension the economy. There’s multibillion naira being held in the nation’s Pension Funds Accounts, yet retirees/pensioners are owed for many months and years, suffering in penury and unable to cater for their health and family needs. Some die in the processes of waiting to be paid. This affects all categories of pensioners, in the private sector, in the civil and public sector, the military and paramilitary, the local, state and federal government.

    The National Assembly and executive arm should adjust the Pension Act to give the retiree the liberty to decide how much to withdraw as gratuity on retirement from service. They should be allowed to withdraw not less than 80% of the balance standing in their Retirement Savings Account. If the government still insist on holding on to something, it should not be more than 20%. For the retiree who wants his/her total gratuity to be paid to him/her to manage his/her finances, government should give them the freedom and not gag them.

    After all, various laws of the land hitherto enacted by our National Assembly which were meant for the good of the people but which were later found to be deficient in one form or the other are known to have been repealed. In the same vein, the payment arrangement of gratuity under the Contributory Pension Scheme should not be an exception, because the beneficiaries are groaning under it. It is an evil wind that does no good to those it is meant to benefit.

    The labour unions being the representatives of the workers/pensioners should be involved in the decision making on payments of gratuity and pension. They should ensure that the exploitation of the workers/pensioners is restricted by legislation and they should formulate political demands on the political class. They should also educate their members on all the nitty-gritty of payment of gratuity and pension and their implications.

     

    • Elder Okoi writes from University of Calabar.

  • Pensioners urge Fed Govt to reintroduce gratuity payment

    Pensioners, under the Contributory Pension Scheme (CPS),  have called on the Federal Government to reintroduce the payment of gratuity to retirees      .

    The  union accused the government of   shying away from its responsibility as there’s no provision in the Pension Reforms Act that outlawed the payment of gratuity to pensioners.

    The Sector Chairman, Nigeria Union of Pensioners Contributory Pension Scheme, Comrade Sylva Nwaiwu, stated this at  its second post inaugural congress of the union in Abuja.

    He  called  for a review of their entitlements, saying the Federal Government is indebted to pensioners, who retired under the CPS. He said they will continue to fight for their gratuity within the ambit of the law.

    His words: “Gratuity is a right to any public worker who retires from service after 10 to 35 years. The introduction of the CPS was to address the burden of monthly pension liabilities on the government and not that of gratuity. Hence, there is no section of the Pension Reform Act, before and as amended by the 2014 pension reform act that explicitly removes gratuity as a legitimate right to retirees.

    Naiwu said in  the old Defined Benefit Scheme,  government pays gratuity to the retirees and thereafter continues to pay monthly pension, whereas in the CPS, government is restricted to the payment of gratuity, while the monthly pension of retirees accrues from the combined contributions by government and the workers.

    He said from the inception of the CPS, the government has tactically ignored the legitimacy of this important factor in the engagement agreement, without any legal or constitutional justification, thus short changing the CPS retirees.

  • ‘Only 7% of workers receive gratuity’

    ‘Only 7% of workers receive gratuity’

    The Managing Director of Entreprenovate Nigeria, Mr John Olawoyin, on Sunday said that only seven per cent of government workers receive their gratuity after retirement.

    Olawoyin in an interview with the News Agency of Nigeria (NAN) at a programme by Kosofe Local Government, Ogudu, Lagos, said that the indebtedness of government to retirees was worrisome.

    The theme of the programme is “Life After Retirement and Life as a Self-Employed’’.

    The programme, which held at the premises of the local government, had speakers from private organisations.

    He said many of the retirees had died while waiting in vain to receive what they had laboured for through their service years.

    “The high rate of indebtedness to retirees as regard their gratuity is alarming. Only about seven per cent do receive their entitlements on retirement, this is unacceptable.

    “Government, according to records, is owing retirees to the tune of N5 trillion which it wants to convert to bond, this is an inexcusable debt.

    “That governors award themselves mind boggling pension after serving for eight years at most, while neglecting those that may have worked for 35 years is a gross injustice.

    “Most of these retirees either die on the queue waiting to collect their pay or bed ridden waiting to collect their gratuity; it’s a pity that things could go wrong this far,’’ he said.

    Olawoyin said that it was painful seeing retirees suffer after their meritorious service to fatherland while politicians enjoy political largesse.

    “It is painful seeing these pensioners suffer after some have worked for many years without having anything to fall back on besides their hope which is hinged on gratuity and pension.

    “What is more worrisome is the way the politicians are apportioning a larger part of our commonwealth to themselves without thinking about the poor masses.

    “There is a need to restructure our system to encourage workers to be corruption-free while in service because thinking about what their plight may be after service may encourage corruption.

    “In some states of the federation, payment of gratuity is zero, some have not even paid entitlements for close to 12 years now, the facts are there for anyone to cross-check,’’ he said.

    Olawoyin said that workers should endeavour to brace up to face life after retirement in order to live well.

    “Workers need to brace themselves up for life after retirement and they can only do this by ensuring that they save for their future or better still have an investment.

    “That is why we are sensitising workers how to have a good life after retirement. It is possible to live as if one is still in service while in retirement.

    “First thing workers should know is that their salary cannot be enough, so they need to open up for streams of income and not waiting for government alerts only for sustenance.

    “Workers can engage in the provision of services that will not interfere with their job as a civil servant or public servant,’’ he said.

    Contributing, the Sole Administrator of Kosofe Local Government, Ogudu in Lagos, Mrs Jumoke Animawun, tasked the council workers on early preparation for their retirement.

    She said that preparation should start on the day of employment pointing out that early preparation was key to retirement.

    “Indeed, retirement starts with employment. This should be a slogan.

    “Kosofe Council is passionate about workers welfare and that is the reason we are embarking on programmes like this to enlighten workers on what they need to know.

    “Workers deserve to retire and enjoy their retirement, but in a case whereby they failed to plan, they get into dilemma managing whatever the meager they get from pension.

    “Workers need to be financially prudent and ensure that they do not spend all during their years in service.

    “Instead they should spend what is left after savings,’’ she said.

    Mr Rotimi Agunsoye, representing Kosofe Federal Constituency, advised workers not to wait till disengagement from service before investing.

    “This is a wonderful initiative by the local council; workers need to reappraise themselves on how they spend whatever they receive from government as salary.

    “Please do not wait till disengagement before you think of where to invest. The investment should start while in service,’’ Agonsoye, represented by Mr Bowale Benson advised.

    The News Agency of Nigeria (NAN) reports that Kosofe Local Government in partnerships with Entreprenovate Nigeria, Leadway Assurance Ltd and the United Bank for Africa (UBA) held the programme for the council’s workers.

  • Pensioners protest unpaid gratuity in Edo

    EDO State pensioners, from the civil service and local governments, yesterday protested unpaid  pension, arrears and gratuity since 2008.

    Some who retired between 1996 and 2006 said they were not paid salaries in lieu of retirement.

    Their coordinator, Pa Osewmenkha Gabriel, appealed to Governor Godwin Obaseki to use the N23.56 billion bailout funds received from the Federal Government to pay their entitlements.

    He noted that the fund  would settle outstanding arrears and gratuities of state and local government pensioners.

    They carried placards, inscribed: “Mr. Governor, fulfill your 2017 May Day promises to Edo State pensioners (state/local government) without any further delay;” “State/ local government pensioners have been made worse than the Internally Displaced Pensions (IDPs) by the state.”

  • Berger paints workers protest stoppage of gratuity

    Workers of Berger Paints yesterday protested against what they called the stoppage of gratuity, following management’s decision to scrap payment of gratuity to staff.

    They protested at the entrance of the company’s premises at Oba Akran, Ikeja, Lagos, preventing the work from holding.

    The protesters, dressed in their labour uniforms, sang songs and had placards with inscriptions such as, “The labour of our heroes past shall never be in vain”; “Berger paints needs a visionary leader”; “Don’t take our lives gratuity, no way”; “Berger paints management wants to rob us of our future”; “Pay our sacked colleagues their gratuity up till year 2017 and not 2015”; “We say no to gratuity stoppage”; “Don’t eat our future, pay our gratuity up to date” and “Board cannot unilaterally stop gratuity of workers”.

    The Nation learnt that the protest began on Monday. The workers vowed to continue until the management reverses the removal of their gratuity. The protesters are demanding the resignation of the Managing Director of the company, Mr. Peter Folikwe and the Human Resource Manager, Yemi Temisanren.

    National Union of Chemical, Footwear, Rubber, Leather and Non Metallic Product Employee (NUCFRLANMPE) Secretary Comrade Bode Olaniyan, said the essence of the protest was to prevail on the management of the organisation on the payment of gratuity.

    He explained that the stoppage of gratuity meant that even if they worked for 20 years and resigned, they would get nothing.

    “This is against the labour law and it is against the constitution. No law supports that gratuity should be stopped in any organisation. It means that our board of directors just concluded and found a way to embezzle money from our future, by putting a stop to gratuity,” he said.

  • Sokoto releases N2.2b for gratuity

    Sokoto releases N2.2b for gratuity

    Sokoto State Governor Aminu Tambuwal has released N1.2 billion for the payment of accumulated gratuity from 2010 for local government workers.
    Outstanding allowances, amounting to over N662 million, for council chairmen and councillors in the 23 councils was also released. N346,747,891 was also released as severance gratuities to former council officials.
    A statement by the Commissioner for Local Government and Community Development, Mannir Dan’Iya, said all approved funds have been released and payments effected accordingly.
    “If you may recall, Governor Tambuwal had directed the Auditor-General for local governments to compute entitlements of former council workers. Now that the work has been done, payment is starting immediately.
    “All former workers with genuine claims will be paid. The total money released for the accumulated gratuity from 2010 is N1,213,125,208.22,” he said.
    The commissioner added that former council executives will get 50 per cent of their severance entitlements, amounting to N346,747,891.

  • Ogun pays N1.5bn gratuity

    The Ogun State Government has paid a whooping sum of N1.5b to 546 retirees in the state in fulfillment of its promises to offset arrears of gratuity due to retired civil servants in the state.
    The state Head of Service, Mr. Abayomi Sobande, while presenting cheques to the pensioners at the Arcade ground, Oke-mosan, Abeokuta, said that no fewer than 546 retirees were those that retired from service between July and December 2012.
    He added that those that have not collected their cheque due to the year of retirement should wait for their batches as the government would not compromise in its efforts to give them their entitlement which they have laboured for in the state.
    Sobande noted that the government would continue with the payment in batches based on its schedule as released by the Bureau of State Pensions, with assurance to pay as and when due.
    “The Senator Ibikunle Amosun administration is not relenting in its efforts at ensuring the well-being of the retirees and will continue to put smiles on their faces”, he said.
    He said that government would continue paying pensioners in the state in order to cater for themselves, adding that no backlog of arrears of retirees would be left unpaid before and after the present administration end in 2019,
    One of the recipients, Mrs Awojuola Celestina, appreciated the govern-ment’s gesture and gave God all the glory that she was alive to collect her entitlement.

  • Edo pensioners to get gratuities before Xmas

    Edo pensioners to get gratuities before Xmas

    Edo State Government has concluded arrangement to pay the gratuity of 2010, 2011 pensioners next week, a few days before Christmas.

    In a Government Special Announcement issued by the Head of Service, Mrs. Gladys Idahor, she said “there will be pensioner verification exercise for officials who retired in the Year 2010 and 2011 but have not been paid their gratuity.”

    According to the statement, verification of 2010 retirees will hold on Monday, December 21, 2015 at the Staff Training Centre, Okada Avenue, Benin City while that of 2011 retirees will hold on Tuesday, December 22 at the same venue.

    “All pensioners are required to come with the original and photocopy of their Pension ID Cards, Yellow Form, Letter of First Appointment, Letter of Retirement and Biometric Form.”

    The statement added that “pensioners who are successfully screened will be paid their gratuity the following day”,warning that “there will be no verification by proxy.”