Pension, gratuity: Are the retired jinxed?

Once upon a time, retired civil servants always had cause to smile as their pensions, gratuities and other entitlements were paid in time by the federal, state and local governments. The reverse appears to be the case now as many civil servants complain of neglect by the same governments. PAUL OKAH reports.

Retired civil servants in Nigeria are often not happy people as a result of non-payment of their pensions, gratuities and other entitlements by local, state and federal governments after years of labour and service to their fatherland.

While many of them often die out of frustration or depression, others battle with sicknesses that often gulp the savings of their offspring and relatives due to old age and the failure to get their entitlements from the government they served years ago.

Also, the media is awash with news of retired civil servants or senior citizens engaging in protests in different states just to draw attention to their plight.

In Nigeria, pension funds by law are not borrowed, but invested in line with the investment regulations issued by the National Pension Commission (NPC), though as at September last year, the total value of the pension funds under NPC stood at N11.56 trillion.

Interestingly, last year, at the National Economic Council (NEC) meeting presided over by the vice-president, Yemi Osinbajo, the federal government hinted at plans to borrow N2 trillion from N10 trillion pension funds to finance the development of infrastructure.

Briefing newsmen at the end of the NEC meeting in Abuja in December last year, the Kaduna state governor, Malam Nasir el-Rufai, said the decision by the federal government to pull N2 trillion out of the pension funds was reached by a NEC sub-committee.

Also, governors made moves to borrow N17 trillion from the pension funds, but were stopped by massive outcries from economic experts and the general public. According to them, many governors are burdened by accountability deficits, poor managerial skills, and a profligacy lifestyle, such that the money if released, risked being misappropriated, leaving pensioners in limbo.

Pensioners’ charge to FG

Speaking on the 2021 Workers’ Day in Abuja on Saturday, May 1, with the theme “Covid-19 Pandemic, Social and Economic Crises: Challenges for Decent Jobs and Peoples’ Welfare,” the president of the Nigeria Union of Pensioners (NUP), Godwin Abumisi, commended the federal government on the approval of implementation of the consequential adjustment of the new National Minimum Wage for pensioners in the country.

“We are happy with the federal government now; this is because it has approved the consequential adjustment of our portion as regards the new minimum wage. So, we want to use this opportunity to commend the federal government for putting smiles on the faces of the pensioners in the country.

“However, pensioners all over Nigeria are still facing some other challenges, which include irregular payment of their pensions, among others. We are supposed to be paid our pension on a regular basis, but rather it is difficult for our members to be paid in most of the states. That is why we also want the federal government to listen to our plight,” he said.

Another pensioner, Mr. David Ohuo, said their members find it difficult in receiving their pensions, adding that what the pensioners are going through accounts for the high rate of corruption and “it is time to take the bull by the horn.”

“Many people would not want to retire because outside service there is a serious battle to survive,” he said.

NUJ’s appeal

On April 30, in a communiqué signed by the chairman, Mr. Victor Udu and secretary, Mr. Oka Ibor, after its monthly state Congress, the Nigeria Union of Journalists (NUJ), Cross River state Council, appealed to Governor Ben Ayade to settle the seven-year backlog of gratuities owed retired public servants.

According to the union, the non-payment of gratuities to retirees for several years had led to the untimely death of many of them due to hardship.

“We appeal to the governor to consider payment of gratuities to retirees to mitigate the current hardship being faced by these heroes who had laboured for the state. We understand that many of them have died as a result of hardship, without enjoying the fruit of their labour, while many others can no longer send their children to school,” it stated.

FG’s intervention

On April 30, the federal government approved the adjustment in pensions of retirees under the defined benefit pension scheme, arising from the implementation of the New National Minimum Wage Act 2019.

A circular from the acting chairman, National Salaries, Incomes and Wages Commission (NSIWC) on April 29, indicated that pensioners who retired on Grade Level 17 on CONPSS would receive a new monthly pension of N188,688.49, representing a nine per cent increase.

Grade level 16 retirees would receive N154,576.39, those on level 15 would get N123,964.72 (both also representing a nine per cent increase), while the grade levels representing a 10 per cent increase are 14 with N92,194.53; 13 with N84110.56; 12 with 76,604.35; and 10 with N68,114.13.

Levels nine and eight are both with a 12 per cent increase, representing N59,570.18 and 50,520.68, respectively, while for level seven, a 14 per cent increase is recorded, representing N40,934.64, while level six is a 42 per cent increase representing N37,242.21.

Levels five to one recorded increases of 51 per cent, 55 per cent, 57 per cent, 58 per cent and 59 per cent, each level representing N32,49146, N29,179.14, N26.942.50, N25,239.45 and N23,426.17 (the difference in increment ranged from the highest, which is N15,579.78 to the lowest of N8,692.83).

It further noted that President Muhammadu Buhari had approved the consequential adjustment in pensions of retirees, under the defined benefit scheme consequent to the implementation of the National Minimum Wage (Amendment) Act 2019.

In an interview with the News Agency of Nigeria (NAN), the acting chairman, National Salaries, Incomes and Wages Commission (NSIWC), Mr. Ekpo Nta, said the approval would take effect from April 18, 2019.

Nta said the review would not affect workers and pensioners on the contributory pension scheme and added that payments would be effected immediately.

“This review is addressing those on the old pension scheme, which is the defined pension scheme. We would not have sent out the circular if we did not have the ability to look at the cost implications. When such decisions are arrived at, it is not done alone with the National Salaries, Wages and Income Commission. It is done in collaboration with the budget office, the Pension Transition Administration Department (PTAD).

“It is the organisation responsible for everybody on the old pension scheme until the last person on the scheme passes on. It is a transitional arrangement set up by law. We have been anticipating this approval to come in and PTAD that had always been in the picture had made arrangements for the availability of funds and I can assure you, based on what we discussed with them, they are ready to go.

“However, the conditions of the contributory pension scheme are different from the defined scheme. The difference is the workers that are on the contributory scheme are contributing towards their pension in later years when they finally leave the service or retire. They have a portion they are contributing and the government is also contributing a percentage.

“The way it is arranged under this new pension scheme the worker can actually take out extra insurance to cover himself or herself and his or her family in arrangement with their Pension Fund Administrator,” he said.

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