Nigeria Property

Wednesday, March 18, 2015

Tuesday, March 17, 2015

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I’m not ready to feed my Hubby in Prison - Patience Jonathan

B'Haram’s Grievances Legitimate, Says OBJ

Pres. GEJ visits Atiku at home, allegedly asks him to re-join PDP

Monday, March 16, 2015

Is Pension Contributory Scheme A Scam ?

PENSION

Longman Active Study Dictionary defines pension as money that Government or a Company pays regularly to someone who does not work anymore because they are old or ill, while Oxford Advance Learners Dictionary of Current English defined pension as ‘a sum of money paid regularly by a government to people above a certain age and to widowed or disable people or by former employers or financial institution to retired people’.

Pension

The history of pension scheme in Nigeria was first legislated in the country and enacted into law in 1951 which was referred to at that

time as The Pension Ordinance. Though the ordinance was enacted in 1951, it had a retrospective effect from 1st January, 1946. The

colonial pension’s law was primarily designed for the United Kingdom (UK) officers who were moved from post to post in the vast British

Empire. It was meant to ensure continuity of service whenever and wherever they were sent to serve. When the law became applicable to indigenous staff, it had limited application to the extent that it was granted at the pleasure of the Governor-General. Hence, under the ordinance therefore, pension was not an automatic right of Nigerians. It could be withheld at the flimsiest excuse. Since then, the total number of retirees has been increasing at a geometric rate, hence payment of pension was becoming a big problem.

The problem ranges from non-payment on time of retirement benefits and delay in processing of retirement benefit by serving officers. Other

traits include the issue of proximity as pension offices are located far away from most pensioners, especially federal workers, e.g. Abuja,

Lagos and other Zonal offices; and mind boggling corruption by the serving officers that are in-charge of pension are either corrupt or

show nonchalant attitude toward pensioners. Pension continued to remain the same even after salaries of workers increases and inflation

increases.|

The Pension Reform Act 2004 introduced the contributory pension scheme for public sector employees and in the case of the private sector with

five or more employees but some category of the workers was exempted such as the judicial officers who are appointed in the Supreme Court

or the Court of Appeal. Section 291 of the constitution of the Federal Republic of Nigeria spelt out clearly. Other officers that were

withdrawn from the scheme included the Nigerian Army, the Nigerian Police and other uniformed men now takings steps to follow suit.

The main objectives of the scheme as outlined in the Act was to ensure that every person who has worked in either the public service of the

federation, Federal Capital Territory or private sector received his retirement benefits as at when due.

Likewise to assist in providing individuals by ensuring that they save in order to cater for their livelihood during old age as the old

pension scheme often tend to fail, and to establish a uniform set of rules and regulations and standards for the administration and payment

of retirement benefits for the public service of the federation, Federal Capital Territory (FCT), states, local government and the

private sectors that have joined the scheme.

In order to ensure that pension fund is managed in accordance with the act, pension fund administrators were engaged in collaboration with

pension fund custodians to make it successful. Also a supervisory body known as Pension Fund Commission was established all in an effort to

ensure that the pension scheme becomes a success story particularly to pensioners

The stories from the old scheme in the national media are however characterized by scam here and there every day. As a result of these

reports, the senate appointed a committee to investigate and find out the truth of the media reports. In no time, the committee discovered that about a hundred and ninety-seven billion naira (197bn) was allegedly looted. The report was submitted to the senate on 20th June, 2012, that top government officials who are saddled with the funds stole about two hundred and seventy-three billion naira (N273bn) between 2005 and 2011.

Another problem is that when salary is increased, pension is supposed to also increase but this wasn’t the case in Nigeria. It remained

stagnant which renders pensioners helpless and exposed to hunger and diseases which in most cases leads to death. It has also been observed that there are problems between the Pension Commission, Pension Fund Management and the Employers in terms of remittance. The retirees are mostly underpaid and they don’t have a place to go and complain as the three bodies mentioned above resort to blame game. To this end pensioners should plan now, for if you failed to plan now, then you are planning to fail your live after retirement.

It is important to join any of the cooperative societies to enable you invest where you don’t have enough capital to be on your own and

endeavour to build your own house no matter the size or the location. Buy an asset be it a plot, house, shares or other investment that

yield profit and sustain you against rainy days. While in the service, give your children good education, because they would be your future

investment. They would take care of you during your old age and provide your needs. Government would on its part trail and detain all those that are involved in pension scam either to life imprisonment and recover all funds from the corrupt officials. Pension Commission should improve by

monitoring all pension fund administrators and remit the current contribution of potential pensioners.

Government should also improve both old and new systems of pension and increase pension as salary increase, while Auditors should annually

audit current pensions remitted to their respective pension fund administrators and proper records of pension should be kept. Equally the retirement saving account of the potential pensioner should be open to pensioners but restrict withdrawal for easy monitoring of underpayment.

Finally, we sincerely hope that government and all concerned would rectify the above problems so that those who suffered during their active and youthful life would enjoy their old age and retirement benefits without hardship.

By Abdulllahi wuyo

University of Maiduguri

Department of Mass Communication