Pension bill seeks to end corruption in industry

The success achieved so far in the Contributory Pension Scheme (CPC) commenced 8 years ago by the coming onboard of the Pension Reform Act 2004 would remain insignificant and rubbished unless government and other stakeholders succeed in closing all corruption conduits in the old pension scheme, and bring its management under close watch.

The reason is that the impact of the old scheme called “Defined Benefit Scheme” from where a lot of corruption and embezzlement, continued suffering of pensioners and huge pension debt by government continue to occur will rob off on the achievement of CPS.

The new scheme under the supervision of the National Pension Commission (PenCom) as at the end of May 2013 has a pension asset in excess of N3.4 trillion, growing at an average of N30 billion monthly and covering 5.52 million contributors, while about 67,709 pensions are paid monthly as and when due.

Stakeholders at the public hearing on the bill to repeal and re-enact the Pension Reform Act 2013 organised by the Senate Joint Committee on Establishment and Service Matters and House Committee on Pension held last at the National Assembly Complex pointed out the need to end the impunity of corruption in pension management and bring all existing system under workable platform that would guarantee peace of mind for Nigerian workers.

A major highlight of the amendment in the bill is the need to put an end to the era of impunity and in some instances widespread corruption at various Pension Departments in the Office of Head of Service.

So, the PRA 2013 Bill here seeks to enhance the regulatory authority and efficiency of the National Pension Commission to provide oversight on, and reposition the Pension Transition Arrangement Departments (PTADs) for greater efficiency and accountability in the administration and payment of pensions.

Accordingly, the Commission recommends that to further achieve efficiency and end the tide of corruption in the Scheme, PTAD should be empowered to employ their staff and make provision for their sources of funding, which should primarily be for government subvention. While the FGN and FCT Pension Transitional Arrangements Department will have the responsibility to issue payment instructions to the office of the Accountant General of the Federation subject to clearance from the Commission.

Chinelo Anohu-Amazu, acting director general, in her presentation said reforming the pension industry for national stability would require the courage and strong determination of all stakeholders, praying the joint Committee of the National Assembly to end the rot in the national pension industry by harmonizing the Bill.

“We recommend that the Commission, as regulators should not be involved in the operational issues of the Departments, but put structures and regulatory framework that give all Nigerian workers and pensioners a new lease of life, as provided today in the CPS.

For the Nigeria Employers Consultative Association (NECA) represented at the public hearing by Segun Oshinowo, its director general, establishing PTAD as separate body that will ensure pensioners are paid directly into their accounts is a master stroke and must be supported to stem the tide of scam in the pension industry.

“We would like to commend the provision of section 6(3) of the Bill which makes provision for direct payments into the account of contributors / beneficiaries. It would go a long way to stem the trend of pension scam in the country.”

According to him, “rather than encouraging separation from the CPS as being clamoured by the different security agencies and paramilitaries for reasons which I feel are retrogressive, we should emphasise a more inclusive pension system that would be properly regulated and strengthened.

“We were most averse pre-2004 when the Contributory Pension Scheme was being proposed, but today we are happier for it given that the foundation and structure guiding regulation has been most wonderful, and we pray this National Assembly to come up with laws that will enhance inclusion and bring many other Nigerian workers including the informal sector under the same umbrella, Oshinowo noted.

National Association of Nigerian Students (NANS), represented by Adamu Kabir Matazu, its vice president, External Affairs, stated in his presentation that the pre-existing pension system before the Pension Reform Act 2004 was bedeviled with plethora of functional, structural and administrative problems such as inadequate funding, increasing gap between assets and liabilities, slow administrative processes and irregular payments.

According to Matazu, harmonising the management of the pension regime in the office of the head of service of the federation would go a long way in bringing stability in the pension industry.

Dave Uduan, chairman, Pension Fund Association of Nigeria (PenOp) in his presentation said the CPS as it is structured cannot be found wanting in meeting its pension obligation and is so protected that there cannot be embezzlement and any form of corruption.

He said that is why the Defined Benefit Scheme should be harmonised and brought under the full supervision of the pension industry regulator, stating that request by some agencies for exemption is selfish and should not be entertained. The implication of allowing them to go is accumulation of national debt, burden for government, huge corruption and embezzlement as well as continuous suffering of the pensioners.

The determination at first instance to reform the pension industry through amendment of the 2004 Pension Reform Act is a huge courage by the present administration. The government should be commended for having taken the step despite a lot of pressures to allow the status quo to remain.

Aloysius Etok, a senator leading the Joint House Committee on Amendment of this Bill would have their names written in golden book and history would not forget their efforts to make the Nigerian pensioners and the generally of Nigerians happier.

MODESTUS ANAESORONYE