Stakeholders want New Pension Scheme reviewed, Better Managed

Stakeholders have called for a review of the Contributory Pension Scheme, operated under the Pension Reform Act 2004 to make it more beneficial for subscribers.

While workers and pensioners want the scheme scrapped and a return to the old scheme, the mangers and labour leaders say it is more beneficial but needs to be better managed.

Some of the workers called for a return to the old system funded through the treasury.

Retirees and workers said pension benefits in the contributory scheme were meagre and never guaranteed happy old age.

 

A retiree from Jigawa, Malam Usman Abubakar, described the contributory pension scheme as a ‘fraud’.

He said that under the new dispensation, workers were expected to contribute 7.5 per cent of their emoluments with equal contribution by the employer.

“Unfortunately after retirement, the lump sum is divided into three and the retiree goes home with only a portion of his contributions.

“Your Pension Fund Administrator (PFA) will tell you that the remaining part of the money will be kept for you to be servicing your monthly pension, while the rest will be invested in a business that no one knows,” he said

He described the arrangement as unfair and unfavourable to retirees and called on the Muhammadu Buhari administration to revert to the old pension scheme.

“Retirees should be given their full entitlements and be allowed to decide what to do with it and not for PFA to decide for them how to invest their resources,” Abubakar said.

However, the Executive Secretary of Jigawa State Local Government and State Contributory Pension Scheme Board, Suleiman Kiyawa, said the state was operating a pension policy that catered for the interest of its workers.

Suleiman explained that under the new scheme, the state government engaged six pension fund administrators to manage the pension of workers.

He said about 500 retired civil servants who retired the state and local government services between January and May were currently collecting their entitlements without hitches.

The Business Manager of Premium Pension Limited in charge of Jigawa, Usman Raji said that the new scheme had a lot of advantages for a retired civil servant.

According to him, one of the key advantages is that even if someone is dismissed from the service, his employer cannot deny him the money that has accumulated in his name.

But some retired federal civil servants in Bauchi condemned the Contributory Pension Scheme and called for a return to the old order.

A pensioner, Dauda Aminu, said that the old scheme was better as it enabled a retiree to determine what to do with his or her gratuity.

He said that PFAs paid little as monthly pension, which was not enough to sustain a retiree and his family.

A civil servant, Joseph Abdu, said that often pension managers decided on how and what to pay individuals without considering their interests.

Abdu suggested that retirees be given bulk money to enable them to plan their future by deciding on investments of their choice.

“You work for a period of time and upon retirement, someone is there deciding for you how you go about spending you own money. To me, the idea looks too selfish and self-centred,” he said.

Malam Abubakar Pantami, a staff of Premium Pension, a PFA in Bauchi, however, said pensioners received their gratuities within 90 days of retirement.

He said that 50 per cent of the lump sum was given to those above 60 years and 25 per cent to those who retired below as 60, while the remainder was spread and paid as monthly pension.

Meanwhile, stakeholders in Borno commended the Federal Government for introducing the Contributory Pension Scheme, saying it guaranteed happy retirement.

They said the new scheme had curtailed massive corruption associated with pension administration in the country.

John Abaya, a lecturer at Ramat Polytechnic, Maiduguri, said that the new system ensured that retired civil servants received their entitlements immediately they retired.

“I think that the 2004 Pension Reform is one of the best things that have happened to our pension system because it guarantees happy retirement for workers.

“Unlike in the previous system, the Pension Fund Administrators pay workers their contribution on retirement,” he said.

Malam Ahmed Sani, a retired civil servant, said, `It took less than 48 hours for my PFA to issue out my cheque when I retired in 2014 unlike in previous years when retired workers died while waiting for their benefits,” Sani said.

Solomon Mamza, a civil servant with Borno Government, appealed to the state government, to adopt the new scheme.

Mamza said that the new scheme was the only solution to delays in payment of terminal benefits of workers in Nigeria.

Also, the secretary of Nigeria Labour Congress (NLC) in Gombe State, Adamu Muhammed, said the new scheme had addressed the problem of fraud in the old arrangement which led to accumulation of unpaid pensions.

“People are still retiring and the arrears are accumulating. The new pension scheme is better because no matter how small the percentage you will receive, you are sure of getting something at appropriate time,” he said.

He said that in Gombe State, the government had inaugurated a committee since 2014 to work out modalities on how to implement the new pension scheme.

Musa Mohammed, a civil servant in Gombe, however, said the old scheme was better so long there was money to implement it.

“Under the old system, gratuities are paid in bulk or in two instalments, and that will enable the retiree build a house or engage in a business venture that will sustain him.

“The second advantage is that a retiree has a guarantee of a reasonable and fixed amount paid to him as pension every month,” he said.

In Adamawa, Federal Government pensioners called for a review of the 2004 Pension Act to address some issues in pension management.

Abraham Galadima, a former Director in the Federal Ministry of Education, said that the old scheme was better in terms of monthly pension benefits.

“The new pension scheme has no human face; there is no reason why I should not be allowed to decide what to do with my money.

“I spent 35 years serving my country and at the end, I do not have complete access to my accumulated pension savings ,” Galadima said.

Malam Umar Gabdo, another pensioner, said that the new pension law did not take into cognisance, the ‘rights’ of retirees .

“I prefer the old pension system because benefits are paid completely in spite of the delays in payment,” Gabdo said.

He called on the relevant authorities to review the law to enable retires to have complete control over their benefits.

Abubakar Kawu, the Chairman of Pension Board in Adamawa, observed that the new pension system had its benefits and shortcomings.

Kawu said that the new system was acceptable to the government because it reduced the financial obligations of the authorities to solely settle benefits.

Pensioners in Kebbi, Katsina, Kano and Zamfara states also called for a review of the law to enhance sums paid subscribers of the new scheme.
Some retirees told NAN that the amount paid to retirees as gratuity was too meagre to make life meaningful for them.

They also complained about the amount paid monthly as pension, saying it was also meagre compared to what was paid under the old scheme.

Kabir Ado, Kano State Chairman of the Nigeria Labour Congress (NLC), said the act should be amended to raise the contribution by the Federal Government.

According to him, retirees under the scheme run by the Federal Government have been complaining about what they receive after retirement.

“There are a lot of factors that push the federal pensioners to complain, that is why a lot of parastatal (agencies) are withdrawing from the pension scheme.

“If they are enjoying they would not have been complaining about it,” he noted.

Ado suggested the adoption of the Kano model, under which the employer contributed 18 per cent while the employee contributed 17 per cent to the pension fund.

According to the NLC chairman, Kano State runs a flawless pension scheme with robust benefits to retirees.

He said since the introduction of the scheme in 2006, pensioners received their benefits within three months of retirement.

“I do not think in Kano state there is any pensioner who is being owed even a month’s pension,” Ado said.

Isa Aremu, a labour leader, also suggested the amendment of the law to allow contributors access to the fund before retirement.

“The fund should also be used to fund housing schemes.

“Contributors should be allowed to borrow money from the scheme to build houses, which means it is not later when one retires before owning a house.

“This will require an amendment of the act to ensure that workers can access their contributions before retirement.”

Aremu said the scheme should also be made more efficient such that a retiree would be paid within three months of retirement.

He also wants all states to join the new scheme to avoid current situation in which some state governments are unable to settle the retirement benefits of workers.

Aremu advised National Pension Commission (PenCom) to expand the scheme by enrolling people in the informal sector.

According to him, only about nine million contributors are registered under the new pension scheme out of the more than 80 million eligible contributors.

“Labour is ready to partner with PenCom to make sure that the more than 70 million workers not captured under the scheme are brought in.”

Ashahabu Lawal, a pensioner in Katsina State, said it took him six months to start receiving his benefits after retirement.

He said that what a pensioner received under the new scheme was grossly inadequate to cater for his wellbeing.

Lawal also criticised some PFAs for refusing to pay reasonable amounts to enrollees.

He also blamed PenCom for undue delay in processing retirees’ entitlements, thereby causing problems for them as they waited to be paid.

Another retiree, Adamu, attributed delays in the settlement of retirees’ benefits to failure of the commission to do its work on time.

Muhammadu Sani, an ex-officio member of National Union of Pensioners in Sokoto State, called for harmonisation of pensions in the country in line with the national minimum wage.

He also called for periodic review of the pensions in line with economic realities.

” The Federal Government should also enforce new pensions circulars in states and local governments,” he said.

A pensioner, Tukur Kofar-Atiku said most pensioners in the country were languishing in abject poverty.

“Most of us are receiving peanuts as monthly pensions and the disparity in the pension regimes is not helping the situation,” he noted.

Some pensioners in Zamfara also called for “ better pension” management to make it more beneficial to retirees.

AHaruna Muhammad, a former staff of the Independent National Electoral Commission complained about the gratuity he received after retirement in 2010.

“Though I did not experience any delay before I started receiving pension after my retirement, the amount given to me as gratuity was not much compared to what my colleagues using old pension scheme collected.”

He called for a review of the scheme to enable retirees to receive more money.

“Much needed to be done in order to strengthen the system and make it more beneficial to enrolees,” he added.

On his part, Ummaru Sulaimanu, who retired from the Federal Ministry of Information, said he received his benefit after eight months of retirement.
“From the time I collected my gratuity, my monthly pension kept coming on time without any delay.”

He however noted that the new system was not good for retirees because of “the meagre amount paid as gratuity.”

“It is unfortunate that the money will not be enough for a retiree who retired without possessing a house and wants to buy one with the gratuity.”

Also, Muhammad Dankande, the Zamfara State Secretary of Nigerian Union of Pensioners (NUP) said that the major weakness of the new system was in the area of low amount paid as gratuity.

In Kebbi, where the new pension scheme took off in 2014, the retirees expressed hope that it would be different from the old scheme through prompt payment of entitlements.

Bala Habibu, the Secretary of Pensioners association, said the adoption of e-payment of entitlements to retired personnel had been successful, so far.

Sadiq Kaoje, a former Chairman of the state branch of NLC, said the new scheme had been accepted by workers, and expressed the hope that it would translate into “happy old age for contributors”.

A civil servant, Hamza Galadima, prayed that the new scheme would eliminate long delays in the payment pension as experienced under the old one.

“Even though the scheme is new, the prospect of the benefits of comfort at retirement has been imbedded in it and we hope it will remain beneficial to contributors,” he said.

A pensioner, Malami Bagudo, complained that the new scheme operated in the state did not review the pension rate for retirees.

“If the rate is not reviewed then the pensioner’s old age would be in pain, especially considering the high cost of living. We hope authorities would review the rate.”

However, Sokoto State Treasurer of NUP, Mu’azu Atto, and a Kaduna-based lawyer, Pascal Nickaf, called for the abolition of the contributory scheme.

“The contributory pension scheme is marred with a lot of challenges since it was introduced in 2004 and so far, it has not been beneficial to the retirees, particularly as they don’t usually get their benefits on time.

“More so, because workers contribution is usually very little, at the time of retirement the retirees end up with a very small amount as gratuity and a little package as monthly pension.

“In this kind of situation, no worker will be looking forward to his or her retirement because for a worker, retirement means a bleak future and that is why most civil servants don’t want to retire.

“The scheme is a complete failure since it cannot guarantee its main goal of ensuring happy old age for retirees.

“It should be abolished. Anything short of that will not favour the beneficiaries,” Nickaf said.

Atto on his part said government should revert to the old system to guarantee equity and early payment of entitlements.

” Some pensioners are now receiving about N4, 500 as monthly pension,” he said, and wondered how a person would live on that amount.

Christiana Auta, Business Manager, Premium Pension, Kaduna Office, however, attributed delays in payment of retirees’ entitlements to failure by PenCom to remit funds to PFAs on time.

“As I am talking to you now, we have not received retirees bond from PenCom for workers that retired from January to May this year and June is almost ending.

“The affected workers are yet to receive their entitlements because after preparing the payment template as designed by PenCom we will have to send same to PenCom for approval.

“Usually, the commission accepts only one payment template from a pension administrator per day.

“So these are some of the challenges confronting us as pension administrators,” Auta said.

NAN