Minister of Finance and Udo Udoma, Minister of Budget, the Director of Budget and the office of the Accountant General in plenary to ask them what they were doing about the issue of pension in the country as it relates to FG. They briefed the House on the steps they are taking; they didn’t deny that there are outstanding liabilities affecting the federal government pensioners because by then we were talking of a quantum of liability affecting the contributory pension to the tune of N285 billion and that of the old scheme of Pension Transitional Arrangement Directorate, PITAD was to the tune of 176 billion. What happened after our several engagements and interaction with the stakeholders, the Nigerian Union of Pensioners, it was agreed and also directed by Mr. President that a committee should be put in place to reconcile the figures and that will be a kind of step forward for them to reconcile the figure and see where will the money be moped up so that at least the process of payment should start. I am happy to see that the challenges we have of even monthly pension payment is now over, especially affecting the military, the civil service pensioners because as I am speaking to you, they always get their monthly pension as at when due, but the only remaining challenge we have now is accumulated arrears of increases that happened over the years. An example of it is the 33% arrears which affected the Police, Military and so on, but luckily for the Military, they have an outstanding of only one year but the Police have like two years arrears. With the engagement we had, and now I am happy to report that even that of the Police, arrangement is being made now to pay them at least one year and then leaving the remaining of one year. We are hopeful that the outcome of this presidential committee will even come with the total solution that will bring leeway and one of the things we are suggesting to the committee is that they should recommend to the President to either use part of the recovered looted fund or any other fund available to settle the pensioners because pension is a right, it is not just a kind of privilege. This is the line of thinking the committee is taking so that at least it will be very easy if President proposes a viarment or a kind of supplementary budget to see that we have verified pension problem or pension liabilities, this is the quantum of money he is seeking for approval from the National Assembly to pay them off. The National Assembly, particularly my committee will swing into action to make sure that we take all the necessary actions.
Apart from all these effort the committee is making to make sure that at least we reduce the challenges to the barest minimum, I am happy also to tell you that the day the Minister appeared in the House, the problem affecting the contributory pensioners, those who retired right from 2016, none of them received payment up till the end of last year but I am happy to say that the release of the N54 billion to PENCOM gave a sigh of relief to pensioners under that scheme. I have the record now, they utilized the N54 billion released to them to pay the remaining balance of pensioners that retired in 2015 and they were also able to pay pensioners that retired in 2016 from January to August. In that category, only those who retired between September to December last year and those who are now retiring from January to date that are the leftover to be paid and effort is being made by the committee and the commission to source for money so that they are paid as soon as possible.
In general, this is what is happening in terms of the challenges we have in pension and I want to assure you that the committee is doing everything possible, we are in a daily engagement with all the agencies concerned to make sure that at least, if they have challenge, let them tell us, if we have any observation, we tell them so that we are putting our synergy together to make sure that at least, before the year runs out, something good for the pensioners will be out.
Honourable Shekarau corrected the argument that after 75 years, if you refuse to die, you will benefit no more, saying with the reforms in place now, it is not true because it has already been specified that those who are still under the defined benefits scheme will never stop enjoying their pension till when they die and even when they die, they will calculate a certain amount that will be paid to your next-of-kin and that is the end of the matter.
That is those who have not migrated to the contributory pension because you know we are operating two schemes now, when the reforms took over, they gave a ceiling that all those who retired before 2007 should still remain under the defined benefits scheme, that is the old scheme and they are the ones being taken care of by PITAD which will only cease to exist only when the last pensioner under that scheme dies. The contributory pension is your contribution, the contribution of your employer even when you die or you do not die after you are 70 years, it is your money your next-of-kin is supposed to claim. Nobody should tamper with it. Why are they investing for you? Part of what the law provides is that investment will be made and then you will get profit out of it. Are they the ones who will determine your lifespan? They can’t do. If they say they will not pay anyone who has not died at that age, he can take them to court. This is the truth of the matter. There is no any lifespan limit that will not allow you to benefit from what you have contributed. Definitely, the law has not provided it.
Finally, this pension problem came as a result of what? Because I thought that this money that people are contributing when they are in……
Let me quickly explain to you. For the old benefits, the problem has been accumulated over the years because of corruption and the acts of individuals. This started right from the desk officers who were in charge. Before, even before the coming of PETAD, each ministry and agency takes care of their pensioners so some scrupulous elements took advantage of that, they will remove what is due for your pension and keep it in an account; some even use their personal accounts. When people retire, the money is not there because people have deducted it from their salary and they have squandered the money. But now, with the coming of PITAD, it is PITAD that is taking care of everything. The issue of those desk officers and pension officers that were doing what they liked in different agencies is no more because everything is coordinated by PITAD. Those are the reasons and some of the problems that brought us to this quagmire. There are some challenges with the new contributory pension, which we are suppose not to have. In the reform, it is provided that that Pensioner will contribute and the employer will contribute and then, because we are like in a transition period, a clause in the Act provides that the federal government will also provide 5%, what is called “redemption money” and that redemption money, if the federal government pays including the two contributions already in your account, that is what will be calculated at the time of your retirement. The new reform does not require what we previously call gratuity but now they call it lump some money so that when you retire and the three contributions are into your account, they can calculate a certain amount that they can pay you upfront so that at least you will start your life while the law provides how you will be getting the remaining contribution and so on.
Unfortunately, for one reason or the other, the federal government was not able to fulfil that aspect of the payment of 5% redemption money. That was what brought this problem over the years. In addition, for PENCOM now as I am speaking to you, they are already aware of the number of Pensioners that will retire in 2017 because they have the data of all civil servants, so they will look at their data and then they will calculate the 5% and know the quantum and that is what they will capture in their budget. In 2017, what we require as 5% redemption money may be over N90 billion. Unfortunately what is budgeted may not be released to them. Let me give you an example of last year, they requested for N91 billion and at the end of appropriation, only N5o billion was provided, you can see that there is a deficit right from the budget process and then within the year, out of the N50 billion that was appropriated, only about N18 billion was released. It was through this intervention that the remaining 54 billion which was out of the outstanding budget provision of 2016 that was released. If not because we intervened, the year would have run out without them getting the remaining balance and then the problem and challenges will continue. In that aspect, we have about 2-3 challenges. One, budget deficit, secondly, lack of proper budgetary release in the year and that is it because the whole issue rounds around the federal government. I am happy to tell you that now, hardly only very few cased do we have with the employers, the employee has no problem because it is direct deductions and the employers, because of the hammer PENCOM has on them, they do not default, they also pay because PENCOM has gone to the extent that if we detect that you are not remitting what you are supposed to remit for the employer, we will hand you over to EFCC or we will sanction you. Just recently, they used that mechanism to recover over N30 billion and all this money, when they challenged the employers, they could not deny so quickly they remitted the money and each and every person affected has been paid into his account. They have a kind of monitoring mechanism that any defaulting agency or ministry can be sanctioned in terms of what they are supposed to contribute for the employer.
It has been argued in many quarters that the fear of tomorrow for most civil servants over not paying pension promptly is also responsible for the growing corrupt practices. Honourable Shekarau raised this as one of the issues when he moved the motion on this matter in the House of Representatives. He argued that if pensioners will continue to be treated in this way, there is no way people will not be corrupted when they look at the life their former bosses who have retired live. I gave example and instances which I usually get on a daily basis here from pensioners. I gave them because people will be jittery an example of a retiree that came with his wife under this contributory pension scheme. The retirement time of the husband was January last year, he retired and then stayed at home thinking that immediately he will get his own benefit, but the benefits were not coming and then he said okay, now we have a backup because the woman was still in service so at the end of the month at least when she is paid, something will come. Unfortunately, I think around September, the wife retired and she fell in the same trap with the husband. They continued staying at home, no food on the table, children will ask questions and they became ashamed. They came to the extent of telling me that even sometimes when they go back to their colleagues in their working place, some people when they receive they one or two times, they will start dodging them. Actually, if this continues to persist, the issue of fighting corruption will never be successful because people will go any length to make plans for the future in their own way.