Saturday, November 27, 2021

Pension Scams: The Untold Story Of Retirees In Despair

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The recent suspension of the Director General of the Pension Transitional Arrangement Directorate (PTAD), Nellie Mayshak, over an alleged fraud has, once again raised questions and concerns about the future of the country’s workforce.
A cross section of Nigerians among whom are pensioners and some personnel who are still working, have told nationalTRAIL that they were not only disappointed, but also discouraged with the news that an agency that was established to check past situation where those responsible for the management of pension funds feed fat at the expense of the pensioners.
According to a senior civil servant who is due to retire in the next few years, who plead that he should not be mentioned in print, the news of fraud in PTAD was sad, and that it was discouraging to those of them still in service, saying that it was also a sad reminder of not too long ago when several pensioners die while waiting to get their entitlements, after given all their productive years in service of the nation.
“ As a civil servant, still in service, he said such news is very distressful, and more or less a reminder that I should find ways of taken care of my future before I retire, if I do not want the fate of so many retirees to befall me.
“ Little wonder, corruption cannot end within the public service, except something is done urgently to assure us of a future in retirement, we will just be going in circles.”
PTAD was established in accordance with the provisions of Section 30 sub-section (2) (a) of the Pension Reform Act (PRA) of 2004 (amended in 2014) to specifically handle pension matters concerning those who either retired before the Pension Reform Act of 2004, or were not captured in the new scheme.
It is to specifically administer the Defined Benefit Scheme (DBS), with the view to addressing those complaints of pensioners, which has to do with; non-payment of monthly pension, short payment and gratuity, removal of name on pension payment voucher, non-payment of harmonised pension arrears, irregular payment of federal pensions and non receipt of pension after retirement, delay in payment, and all related issues.
Investigation reveals that the establishment of PTAD was to insulate the pension administration from the allege huge fraud that had engulfed Abdulrasheed Maina, now at large, when he chaired the Pension Reform Task Team (PRTT).
But apart from frauds such as this, nationalTRAIL discovered that billions from the pension funds are every month pocketed by 21 licensed Pension Fund Administrators (PFAs), four Pension Custodians(PFCs), and seven Closed Pension Fund Administrators (CPFAs), and the country’s pension regulator, National Pension Commission(PenCom).
The both the 21 PFAs, four PFCs and the seven CPFAs, are all privately owned, except for one of the PFAs, which has government a agency’s equity, and PenCom, which regulates the pension industry, yet they rake in billions every month from what is described as ‘Asset Based fee’ or Management fees.
As at December 31 of 2014, the total pension fund assets was said to have hits 4.6 trillion in naira, with an estimated growth rate put at 25 percent by the PenCom, during the past eight years.
Similarly, the monthly PenCom report, for November 2015, showed that as at that date, the total pension fund assets stood at 5.2 trillion naira.
It is from this huge amount of money that these operators as well as the regulator retain the following percentage;

RSA 1.60 0.40 0.25 2.25
CPFAs 1.00 0.40 0.15 1.55
AESs 1.00 0.40 0.15 1.55
RSA RETIREE 0.50 0.15 0.10 0.75
According to a reliable source at the PenCom, about 2% of the total Retirement Savings(RSA) Fund alone, which as at last November, was well over five billion naira(N5bn) is usually retained by both the pension administrators and pension custodians, who in turn remit 0.25% to PenCom, without correspondent services either to the pensioners, or even to the nation.
The source further told our correspondent that the percentage was even higher than what it is presently.
“ The fee was initially pegged at three percent before it was later reviewed downward, and you would wonder what they do to merit such huge amount of money.”
nationalTRAIL also learnt that for instance; Stanbic IBTC Pension Managers Limited, alone rakes in almost two billion naira(N2bn) every month from the Asset based fees on the RSA fund , an amount much more than what many states of the federation today take away from the monthly Federation Account Allocation Committee(FAAC) meeting. Since Stanbic IBTC has under her management close to 2 trillion naira in her fund under management.
In the month of January for instance, the three tiers of governments of the federation were only able to share the sum of N370,388,451,642.37, with some states, like; Cross Rivers, Ekiti, Gombe, Ogun and Zamfara only managing to take away, little above one billion naira, while Osun got far less to discharge their responsibilities to the people of their states.
A civil servant with one of the federal agencies in Abuja, observed that, “yet a single pension administrator with no direct responsibility to the people in the provision of social services, walks away with such huge amount from the sweat of pensioners every month.”
A pensioner who still earns a partly sum of fifty thousand naira(N50,000), after serving the country for 35 years in one of the most challenging para-military organisations laments the poor condition of the pensioners, as against affluent lives of the pension managers.
“ Just imaging with all my 35 years of service without a single query, my pension a month is not more than fifty thousand naira (N50,000), but I hear that those managing our pension are living from our sweat, just imagine that kind of imbalance.”

 

By Emmanuel IFFER, Abuja

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