Prior to 2004, Nigeria operated a uniform pension scheme both in the Public and Private sectors.
But the old pension scheme ran into troubled water as it was bedevilled with a myriad of problem
It was largely characterised by embezzlement, unsustainable liabilities, inefficient administration and weak supervisory regulations.
Innocent pensioners were denied their life savings and sentenced to a life of despair while many of them died untimely death.
The new Contributory Pension Scheme which commenced in Nigeria in 2004 is aimed at correcting anomalies of the old discredited pension scheme.
As compared to the old pension scheme where most of the accounts were not fully funded with no ready funds to pay pensioners, the contributory pension scheme is fully funded and makes the contributor to account for his or her own self security.
Under the contributory pension scheme and as stipulated by the pension act of 2004, the employer is expected to contribute a minimum of ten percent of the employee’s monthly emolument.
It has contributed to the individual employee’s Retirement Savings Account, RSA, and is accessible as benefits upon retirement except for special cases such as loss of jobs or death of the contributor.
A unique feature of the contributory pension scheme is that the contributions are invested in stock exchange while the pensioner works to provide steady income in old age and retirement.
As at 2014, the national pensions commission can boast of trillions of naira of pensioners fund in its kitty.
Recently, it was rumoured that state governors had perfected plans to borrow Seventeen Billion Naira from the pension fund for recurrent and capital expenditure.
Now, the question is, if the pensioners have so much money in their accounts, why has it become increasingly difficult for the federal and state governments to pay pensioners their retirement benefits as and when due.
Is the new contributory pension scheme going the way of the old pension scheme
As laudable as the contributory pension scheme is , its implementation at maturity is appalling and especially worse at the state level.
A situation where contributors are denied their benefits, years after retirement is rather callous , wicked and unacceptable.
There must be something wrong with a pension scheme that calculates exact date of retirement without calculating at the same time the exact amount of benefits due to the retirees on their date of exit from the service.
The National Pension Commission, Economic and Financial Crimes Commission and the Independent Corrupt and Other Related Practices Commission should be interested in prompt payment of pension benefits.
Henceforth, delayed payments of pension should attract market rate interest.
Settlement of pension benefits must not take more than seven working days after start of retirement.
Fear of delayed pension payment fuels corruption in Nigeria and all pension stakeholders should be fair to the pensioners who worked hard to serve their country in their active days.
Tayo Sanni
pub-5160901092443552
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