N8.7tn pension fund: PenCom bars PFAs from investing in bonds issued by nine states

The National Pension Commission has barred  pension fund
administrators from investing in the bonds of nine states that have
yet to amend their state pension laws and join the Contributory
Pension Scheme.Punch reports

Findings also revealed that this restriction might be extended
to 15 other states that had joined the CPS, but were not showing
full commitment to funding the Retirement Savings Accounts of their
workers.

Latest figures from the commission showed  that as of March
2019, the number of states that had enacted laws on the CPS stood
at 27.

Yobe State is  still operating the old Defined Benefits
Scheme and has  taken no action towards adopting the CPS.

Six states,  Katsina, Bauchi, Borno, Benue, Kwara and
Pateau have drafted bills, while in Akwa Ibom and Cross
River,  the bills are still in the houses of assembly.

The commission stated that the states that had commenced
remittance of pensions to  workers’ Retirement Savings
Accounts and were funding their accrued  rights were Lagos,
Ogun, Kaduna, Niger, Delta, Osun and Rivers.

The CPS was established under the Pension Reform Act to replace
the DBS.

This was because the DBS had huge liabilities, which were not
being funded, leading to situations where retirees endured long
waits to get their entitlements, while many of them died without
being paid.

Unfortunately, the same scenario, which was  prevalent in
states operating the DBS,  is now happening  in  the
states operating the CPS due to poor funding of the scheme.

The Head, Corporate Communications, PenCom, Peter Aghahowa, said
the commission could not impose the CPS on the states, but could
only use moral suasion.

He said, “The states have to enact the laws to do the CPS
because they are going to operate based on the provisions of the
laws. We can only encourage them because of the benefits in the
scheme.”

According to him, if any state plans to raise funds through
pension bonds, it must have met the CPS criteria before it could
have access to such.

For now, he said, those that had not enacted the laws were being
encouraged to do so.

He said “We don’t invest in  bonds  of states that
have not enacted their laws. We have some that are not complying
properly, some are complying partially. I believe we will review
some of those things again. But for now, if you have not even
enacted any law, don’t think we will start investing in your
bonds.”

Pensioners lament agonies, labour seeks
review

Retirees under the CPS have lamented their ordeal as state
governments, which have started the scheme continue to falter in
remitting contributions to the pension fund administrators

The PUNCH’s investigations showed that most of the states that
had passed the law had not been remitting government and workers’
contributions to  the Retirement Savings Accounts.

Delta: Retirees wait for six years

In Delta State, beneficiaries of the CPS said many of them spent
over six years after retirement before being paid their
entitlements.

But the state government said although the scheme started
shakily, the Governor Ifeanyi Okowa-led government was gradually
righting the wrong of the past.

Some of the contributors, who spoke with our correspondents,
lamented the delay in process, adding that many of the retirees
died before the payment of their entitlements.

They also accused officials of the pension fund administrators
of also deliberately delaying payment into retirees’ accounts when
the state government had released funds to them.

A retiree, Mr Anthony Osanekwu, lamented that he had not been
paid his harmonised pension.

Osanekwu, who said he retired as a ‘functioning director’ in
2012, lamented, “We that are in the Contributory Pension Scheme
have been suffering. The promises have been on without
fulfilment.

“In the same situation, they have not paid the harmonised
pension which is the main thing. They just pay something.

“In fact, one of us died two weeks ago and he was buried last
week in Asaba here. He retired as a director in higher education.
So people, who retired at that level, have been suffering for over
five years.”

Similarly, another pensioner and   member of the state
Association of Contributory Retirees, Mr G. O. Aduwa, confirmed
that he got his payment three years after retirement.

Aduwa, who left the state public service in 2014, criticised the
manner the  government was operating the scheme. He said he
was worried that the government that enacted the pension law did
not abide by it.

Reacting to The PUNCH’s enquiry, Chairman, Delta State Bureau of
State Pension, Mr Tony Obuh, said the scheme was being positioned
to meet its obligations to retirees.

He said, “There is a plethora of issues and the very enlightened
and inquisitive ones know the challenges. Hence, we have a robust
relationship, notwithstanding our indebtedness.

“The  scheme was programmed  to commence on a solid
footing, unfortunately it  failed ahead of  take-off
!

“Whereas the state government was expected to build up funds
ahead of commencement, a number of factors combined to frustrate
this. When payment commenced eventually, it was with a heavy burden
in the neighbourhood of N15bn.”

When  asked if the board was meeting its statutory
obligations, Obuh said, “Yes, on a steady and sustainable basis, on
the principle of first come first served, with  monthly
releases from the government.

“With the current monthly receipt of N500m, we pay monthly
adhering to the principle of first come first served. At the
moment, we are in the September 2015 batch.

Lagos compliance

Lagos has been consistently funding the RSAs of workers, but has
a huge backlog of arrears from the accrued rights.

This had led to delay in payment of pensions to retirees under
the CPS.

According to the Lagos State Pension Commission, the state
is  still settling the accrued rights of workers who retired
between 2015 and 2016, and has not commenced the payment of 
pensions of those who retired after.

A retiree, Mrs Olushola Ola, said, “I retired in February 2018,
but I could not be placed on pension now until they settle all 2016
and 2017 pensions.”

Osun: Retirees take to teaching in private schools,
farming

In Osun State, many state pensioners, comprising state civil
servants, primary and secondary school teachers, said the last
remittance to their RSAs was made in September, 2015.

A retired secondary teacher, who left service in August 2016,
Mrs Titi Arowosegbe, in a chat with one of our correspondents said
the last remittance for all those that retired same year with her
was in September, 2015.

She said the last notification of remittance they got was that
of  the month of September, year 2015.

“Our batch left service about two years, eight months ago and
since then, we are still expecting to be paid our pensions. I got
the last notification of remittance from my PFA in September 2015.
That was almost one year before I left service,” Arowosegbe
said.

A retired local government employee, Alhaji Kamar Ibrahim, who
left service in December 2018, said the last remittance by his PFA
came in August 2017.

When asked about the cause of the delay in paying the
pensioners, Ibrahim admitted that many retirees usually commenced
processing of their exit papers late.

He, however, said the government should be blamed for the delay
in paying the pensioners, saying haphazard remittance of deductions
from workers’ salaries and government contributions into RSAs
caused the delay.

He added that  the delay in remitting deductions as and
when due, meant workers would not get interests that should have
accrued on the contributions.

“The situation is like this, I left service in December 2018.
Government deducted my own contributions for the pension scheme up
till the time I left service but the sum is not remitted to my PFA.
Government also did not add its own contributions.

“If the  government chooses to pay me next week and makes
money available to my PFA few days before they call me to 
pick my cheque, I will not be paid any interest on the deductions
because  they got to my PFA late. So I won’t get the interest
that would have accrued if the PFA had been receiving my
contributions as and when due,” Ibrahim concluded.

When asked about  how they have been surviving, Arowosegbe
said she had turned to vegetable farming.

Mr Gideon Adeniyi and Mr Rasaq Adelu, both retired teachers,
said they took up jobs at private schools, but later left the jobs
because they could not cope with the rigour.

Ogun has not contributed to workers’ RSAs 
for   108 months, says NLC

The Ogun state chapter of the Nigeria Labour Congress disclosed
that the outgoing administration of Governor Ibikunle Amosun, had
not remitted funds to workers the RSAs for   108 months
.

The state chairman of the  NLC ,Akeem Ambali, disclosed
this to The PUNCH exclusively .

Ambali, however, said the governor had promised to offset all
the debts by the end of April .

When contacted on the plight of the pensioners in Ogun state ,
the  Secretary of the Nigeria Union of Pensioners , Bola
Lawal, said the state government had not paid gratuities to retired
local government workers and teachers from 2011 to 2019 .

He further said  that retirees from the core civil service
had not been paid from 2014 to 2019.

Attempts to get reaction from the state government on the issue
was not successful as the commissioner for Budget and Planning, Mrs
Adenrele Adeshina, said she did not have the facts with her as of
the time of filing this report.

NLC seeks review

But the NLC headquarters expressed concern about the loopholes
in the CPS, saying workers at the state and federal levels deserved
a uniform contributory pension scheme.

The union said this while speaking on the issue of the
non-funding  of accrued rights.

In an exclusive interview with one of our correspondents, the
General Secretary of the NLC, Peter Ozo-Eson, said, “The point to
be made is that when people have worked and laboured for their
fatherland, they are expected to be comfortable after retirement
through a reasonable and regular pension plan.

“Part of the issues in the present pension arrangement is that
the Pension Act does not compel state governments to belong to the
arrangement. A number of them voluntarily joined the contributory
scheme while some have not. Among those that have joined, some are
remitting contributions regularly, while some are not doing
so.”