Nigeria’s National Pension Commission (PENCOM) shocked the world last week with chilling news on how state governments and thousands of selfish and recalcitrant employers in the private sector persistently frustrate the nation’s tottering contributory pension scheme (CPS), thus inauspiciously tormenting Nigeria’s pensioners.
PENCOM’s 2020 fourth quarter report shows that in a workforce of about 90 million people, only 9.2 million are registered with the scheme after 15 years of its existence. That is about 10 per cent of Nigeria’s workforce.
That in itself is a colossal failure on the part of PENCOM. The regulator is merely shedding crocodile tears in its report. The report shows that PENCOM has done practically nothing to mobilise millions of micro entrepreneurs in Nigeria’s unwieldy informal sector into the CPS. In the absence of a national social security system, they would all retire into the over-stretched African extended family system and become a burden to relatives.
However, the most devastating news in the PENCOM report is that of the less than 10 per cent of the workforce enlisted in the CPS, the accounts of 38 per cent or more than three million contributors are empty.
About 24 state governments and thousands of employers in the private sector constantly deduct eight per cent of their workers monthly basic salaries but defiantly refuse to remit them to designated pension fund administrators for investment in interest accumulating ventures.
The greatest losers are contributors in the private sector. Their employers are feeding fat on deductions from workers’ pay. The irony in the plight of private sector pension contributors is that 70 percent of them will never get their contributions back. The act of deducting workers’ pays without remitting to the PFAs is a criminal offense.
Unfortunately, no one is standing trial for the crime. PENCOM is either too docile or criminally collaborative to enforce the law on pension deduction remittance.
I am one of the casualties of the regulator’s criminal docility. Sometime in 2009, there was a flurry of activities from PENCOM which resulted in stampeded listing of workers in the CPS. PENCOM had apparently threatened the recalcitrant employers with criminal prosecution if they fail to register their workers with the CPS.
The employers complied and in most cases imposed PFAs of their choice on workers. The law requires that the contributor opens an account with a PFA of his choice. Most of the contributors were deprived of that privilege.
I was working with Leadership Newspaper at that time and the company opened a pension account for me with IBTC Pensions. A few months’ deductions were paid into the account before the remittances dried up. If Leadership Newspaper was sanctimonious enough to placate PENCOM with a few months’ remittances, my next employer which I served for seven years was too obdurate to be threatened by a collaborative regulator.
Even as I had a pension account with IBTC, a new account was opened with another PFA. However, not one month’s contribution was remitted into the new account.
Sometime in the opening months of 2020, I had a phone call from the second PFA. The man at the other end lamented that my pension deductions were never remitted to them.
He asked for contact with my new employer and I obliged. Some weeks later when I called back to find out my employers’ reaction, the man ignored my repeated calls and never called back.
That reminds me of the claim by officials of Nigeria Union of Pensioners (NUP) that PFAs were to blame for the criminal acts of the employers.
My experience suggests that something happens between the PFAs and some recalcitrant employers. The graveyard silence from the fund keeper suggests that someone might have been settled.
A retired admin director of a leading pharmaceutical company owned by Indians told me last week how his firm spent N500, 000 on inquisitive pension regulatory officials who were tipped by disgruntled staff demanding registration with the CPS.
After the settlement, the regulators never returned and the workers lost the bid to be registered in the pension scheme. The Situation is worse than that now. That explains why 15 years after the establishment of the contributory pension scheme, less than 10 per cent of the nation’s workforce is registered. It also explains why the accounts of three million contributors are empty.
The worsening plight of Nigeria’s deprived pensioners is the consequence of the nation’s skewed income distribution system. The income distribution system allocates huge funds to those who have no need for it and deliberately starve those who need it. That is why Nigeria has the highest number of poor people in the world. It is a rich country of poor people because the rich steal from the poor.
Enugu is one of the states tormenting pensioners with sporadic payments. The state has a huge backlog of pensioners’ pay. Yet the state House of Assembly is frantically working on a bill that would allocate more than 2, 000 pensioners monthly entitlements to each retired governor.
The bill will allocate 900 per cent of a governor’s annual basic salary to a retired governor as pension. The retired governor would be entitled to three cars replaceable every four years.
He would have a retinue of domestic staff and a level 14 officer at the expense of the state government. When a retired state governor dies, his next-of-kin is entitled to 300 per cent of the dead former governor’s annual basic salary as consolation allowance.
The retired governor’s wife would be entitled to N12 million as annual medical allowance even as she and her husband enjoy free medical services at state expense.
Human rights organisations in the state have intimidated the lawmakers into suspending work on the bill. But everyone knows that the bill would one day be sneaked into the system through the back door for the governor to sign into law.
While thousands of pensioners who spent 35 years in the service of the state wait for years to get the pittance grudgingly allocated to them by a cruel income distribution system, a retired governor who spent a scant four or eight years and accumulated more money than he needs in his entire life, gets his own disproportionate share instantly and regularly.
Nigeria is very cruel to pensioners. Despite its abundant resources, it would remain the world’s headquarters of poverty until someone learns to allocate resources in a more egalitarian manner.
