It seems that Nigeria would have disappointed the rest of the world if the Contributory Pension Scheme (CPS) were to run unfettered without spanner being put in the works somehow somewhere. Arguably, the CPS operating under the Pension Reform Act 2004 as amended by the Pension Reform Act 2014 has been the most eff ective and visibly successful programme of the Federal Government since the return of democracy in 1999.
Needless to recount or reminisce on the plight of pensioners in the old defi ned benefi t pension scheme adopted by the various tiers of government and even some private sector establishments before the advent of the CPS. Th e runaway success that the CPS has become is turning out to be its greatest burden. With amassed pension assets of N6.5 trillion and more than seven million enrolees, the centrality of the pension industry in the future development narrative of Nigeria is almost assured. I addressed the issue of the role of pension funds in national development in a widely published article entitled: Th e Liquidity Squeeze and the Traction of Pension Funds.
However, the sore point of this rapidly growing industry is the clearly perceptible lack of adequate public awareness on the workings of the scheme. Th is ignorance permeates even the very high echelon of society including the highly educated circles. Th is lack of awareness can be said to be at the root of the barrage of policy or statutory somersaults emanating from the legislative arm of the Federal Government. Th is however does not detract from the altruism and/or good intensions that could underlie the actions of the legislators behind the more than seven bills snaking their way through the chambers of the National Assembly.
Th ese bills aim to profoundly amend the Pension Reform Act of 2014. One would not believe that legislators deliberately set out to make laws to disorientate a scheme that has run without hitches for twelve years without any known case of fraud. Th e most contentious of the bills already in the works in the National Assembly is the one sponsored by Honourable Oluwole Oke on May 16, 2017 seeking to amend the Pension Reform Act 2014 in order to shut out some paramilitary organisations including the Nigerian Security and Civil Defence Corps (NSCDC), Nigeria Customs Service, Nigeria Police, Nigeria Prison Service, Nigeria Immigration Service and the Economic and Financial Crimes Commission (EFCC). Th is bill has already passed its second reading and is being treated by the relevant Committee of the House of Representatives.
Another one is the Bill sponsored by Senator Aliyu Wamako of Sokoto North Senatorial Zone seeking to “…further amend the Pension Reform Act 2014 to Provide for Defi nite Percentage a Retiree can withdraw from his RSA and for other matters thereto.” Th is clause is recommending that retirees withdraw 75% of the total value of their Retirement Savings Account (RSA) while the remaining 25% remains to service their pension requirements. Th ese two recommendations fall fl at in the face of reason and operability. It negates the whole essence of individual participation and contribution that defi nes the CPS.
It is this individuating element of the scheme that stands it out. Participation in the CPS is an individual thing and not a collective enterprise. Not even when pension funds are managed collectively. Th ere is a fi duciary relationship between an RSA holder and his Pension Fund Administrator (PFA). Th e beauty of the scheme is the freedom of the worker to choose his/her PFA. Th is freedom would further be accentuated by the portability that would come with the impending opening of the transfer window by the National Pension Commission (PenCom). Railroading a group of workers into one pension option is evidently retrogressive.
Also, returning paramilitary establishments to the Defi ned Benefi t Scheme is a giant step backwards into the dark era of dysfunctionality and corruption that characterized pension. Th e commandism that characterizes the military and paramilitary organizations would not even help matters in managing both salaries and pension of their offi cers and men. Th e most devastating of all the consequences would be the ripple eff ect this ill-advised legislative proposal would have. What would prevent all the ministries and even all agencies of government from exiting or having their own PFAs?
We should not forget that one of the demands of the Academic Staff Union of Nigerian Universities (ASUU) in the ongoing nationwide strike is the establishment of a special pension scheme/PFA that would among other things allow professors and associate professors retire with their full monthly salaries. Th e CPS is indeed severely threatened by Nigerian peculiarities and unbridled impetuosity.
Th e government can still bridge the shortfall in the pension of professors if need be without university teachers dabbling into pension fund administration. Th e contributory Pension Scheme remains the answer to the growing pension liabilities in the country and the unimpeachable social security safety net for Nigerian workers on retirement. It is participatory, all-inclusive and transparent. It should therefore be insulated from unnecessary politics and the excesses of meddlesome interlopers and latter day do-gooders. Ezeala, a communication and development specialist, writes from Abuja
