By Obike Ukoh.
When the Contributory Pension Scheme (CPS) came into force via the Pension Reform Act (PRA), 2004, it was hailed by workers as it was meant to bring to an end issues about late payments of retirement benefits to workers.
Initially, it appeared to be so. But lately, echoes from the Scheme, depict a picture of frustration and hopelessness from retirees under the CPS. It is on record that Federal workers that retired in March 2023, are yet to be paid their retirement entitlements.
Reason. The Federal Government is yet to pay the accrued rights of the affected workers. (Accrued rights represent an employee’s benefits for the past years of service up to June 2004, when the Pension Reform Act (PRA) that birthed the Contributory Pension Scheme (CPS) came into effect).
It was as a result of the Federal Government’s inability to live up to its financial obligations, that people were irked when the Minister of Finance and Coordinating Minister of the Economy, Wale Edun, suggested borrowing from the pension funds to finance infrastructure.
Though he later denied making the suggestion, he was lambasted by stakeholders.
On the issue, a national newspaper wrote inter alia: “Perhaps feeling the weight of an office saddled with rebuilding an economy plumbing new depths of uncertainty despite a slew of policy measures already deployed to reverse that trend, he came up with a brainwave to bridge Nigeria’s massive infrastructure deficit by raiding the pension funds.
“ It is insensitive to the plight of the Nigerian worker and a lazy way to raise funds by the government.
“ We categorically condemn the attempts by successive federal administrations to plunder the funds primarily because it is irrational to change a winning strategy.
“At N19.66 trillion, the pension funds are about the only enduring legacy of the Fourth Republic. No wonder Edun and his predecessors regularly toy with plundering it.’’
The paper commended then President Olusegun Obasanjo’s government for introducing the CPS.
Respite for the retirees is not in sight, as the Federal Government has not released funds for settlement of accrued right in 2024.
The release made in the first quarter of 2023, was for outstanding payments in 2022.
To add salt to injury, the Federal Government has constantly reneged to implement its policy on
the upward review of pension amounts under the CPS for 15 years.
This is against policy prescriptions of upward review every five years as stipulated by law.
On this issue, a letter to the Minister of Finance signed by the Director-General of National Pension Commission (PenCom), Aisha Dahir-Umar dated May 3, 2024, reminded the Minister of the review.
PenCom put total Federal Government’s liability to implement the review as at 2023 at N315bn.
PenCom pleaded with the Minister to direct implementation as follows:15 % increment in 2007; 33% increment in 2010;consequential adjustment in 2019 wage; and 20% to 28 % increment in 2024.
A stakeholder, Mrs Oluwakemi Ugwu, who is also the Chief Executive Officer, Nigerian University Pension Management Company Limited, said late payment of entitlements to retirees under the CPS is a sad and ugly development.
“The purpose of the CPS is defeated if you retire and you are not paid your benefits.
“We need supporting legislation to ensure that once the money is there it is not wired to other needs of the government,” she stressed.
In the same vein, the President of the Contributory Pensioners Union of Nigeria (CPUN), Ibadan Branch, Mr. Amao Shittu, lamented the government’s indifference to the plight of pensioners under the CPS.
He said: The reason why former President Obasanjo created the CPS is that benefits will not be delayed, but unfortunately, the reverse is the case.
“Also, recently, FG released palliatives to workers but none was given to retirees. We are not enjoying anything, contrary to the objectives of the CPS, which states that retirees should enjoy their retirement and get their benefits as and when due.’’
Speaking on the development, Executive Director of the Centre for Pension Rights Advocacy, Mr Ivor Takor, stated: “It is common knowledge that federal public servants often retire and wait for extended periods, sometimes a year or more, before receiving their benefits.
“This delay in payment directly contradicts the objective of timely payment of retirement benefits outlined in the Act. It reflects systemic issues within the government implementation of the CPS, which need urgent attention.
“These delays impact retirees’ financial well-being and erode trust in the pension system and the government’s commitment to fulfilling its obligations under the law.
When the Forum of Retired Federal Directors visited the Chairman of Federal Civil Service Commission in Abuja, they also lamented the fate and neglect of retirees under the CPS by the Federal Government.
Prof. Tunji Olaopa, Chairman of the Commission, agreed with them, and called for an impact assessment to be conducted on the scheme to guide against unintended consequences on retirees.
Olaopa made the plea when he received the Chairman (Technical Team) of the Forum of Retired Federal Directors Mr. Ntufam Oqua Eta, on a courtesy visit in Abuja.
Olaopa said he was aware of the challenges.
Quoting Section 171 (3) of the Constitution which says that: “Pensions shall be reviewed every five years”, Olaopa said the demand by the Forum was constitutional and believed every support needed should be given to the organization to achieve their objectives.
Olaopa agreed that those who retired under the CPS should equally enjoy periodic review of their pension like those under the Defined Benefits and Gratuity Scheme.
. The Chairman of the Forum’s Technical Team, Mr. Ntufam Oqua Eta, stressed the need to redress the injustices contributory pension retirees are experiencing.
According to him, the Forum’s struggle is not for the members alone, but for also the next generations to make retirement enjoyable to them.
He said that as many directors retire, they would join their ranks, adding that those who retired under the Contributory Pension Scheme as at 2007 and those before that period, under Defined Benefit Scheme, were not equally treated.
He added that those under the Contributory Pension Scheme were marginalized and badly treated, adding that just like many of his colleagues, he has been earning N131, 000 for almost 10 years when he retired as a senior director.
He also reiterated that contributory pensioners were excluded from all the four revisions of salaries carried out by the government.
“There was one of 15 per cent in 2007. We were excluded. There was one of 33 per cent in 2010, we were excluded. Another one in 2020, consequential adjustment of minimum wage. Also in 2019, we were excluded. “Then the present Salaries and Wages Commission circular, that is 28 per cent increment 2024, we have all been excluded”,he said
He also drew attention to the May 3, 2024 letter written by the National Pension Commission and copied to various concerned government organizations, particularly the Federal Ministry of Finance, to meet the demands of the CPS retirees, adding that no positive response yet.
The worry of stakeholders is that a government will put a scheme in place, and the same government will by its actions plan to destroy it.
The contradiction in the CPS is that government is aware of its potential and even muted the ideal of borrowing from the huge funds to finance infrastructural deficits, while at the same time showed no interest in timely release of accrued rights.
Like the stakeholders said, if the CPS is not implemented in accordance with the Constitution and the Act establishing it, the aim of the CPS is defeated.
The present administration with its Renewed Hope Agenda, should do the needful.
Timely action is also necessary, as these perceived injustices allegedly meted out to retirees under the CPS is responsible for many federal government agencies opposing joining the CPS.
