There’s urgent need to reform contributory pension scheme to benefit retirees- NUPCPS Chairman
The chairman of the National Union of Pensioners Contributory Pension Scheme, Lagos State, Comrade Michael Omisande, granted interview on a number of issues affecting pensioners.
Excerpts:
The Contributory Pension Scheme (CPS) is 20 years, having been introduced in 2024 what’s your assessment of the scheme so far?
Well, to the glory of God, I cannot say the Contributory Pension Scheme CPS introduction 20 years ago is bad or good, it depends on the perspective from which the introduction was viewed, and one may ask why was it introduced? When the Defined Benefit Scheme (DBS) old system was not adequately funded, when the Defined Benefit Scheme (DBS) was characterised with corruption and fraud. There was accumulation of backlog of arrears unpaid. Under the DBS retirees stayed for more than ten years before they were paid their entitlement. These were the reasons Federal Government introduced Contributory Pension in 2004 called the Pension Reform Act.
The Reform was borrowed from developed countries such as Chile and France. In those countries mentioned, the CPS was perfect, the pensioners up till now are still benefiting tremendously, but to my own dismay, when the Pension reform got to Nigeria, the reverse was the case. The Scheme was doctored, all aspects that favoured pensioners were removed from it, and this resulted in the genesis of the problem which Contributory Pensioners are now facing in Nigeria today.
What can you say about pension administration in Nigeria now compared to how it was before the introduction of CPS?
On Pension administration handling Pension matters, I quite agree that the situation is now better when you do a comparison with what was operating before the enactment of the Pension Reform Act 2004 Pension in Nigeria. Under the old system (DBS), the country faced many problems on payment of pensioners’ entitlement due to corrupt practices. The (DBS) was not adequately funded in the budget thereby resulting in unpaid backlog of arrears. Retirees waited up to the period of 7 years before payment, while some of their money usually get embezzled by then pension administrators, it got to a period where by the Defined Benefit Scheme could not be sustained.
But now, since the introduction of the Contributory Pension Scheme, the situation has changed for better, the pension matters are being handled by professionals and financial institution experts, accountability of the Pension fund is the order of the day. The Government of Nigeria allowed National Pension Commission (PENCOM) to handle and monitor all the Pension Fund Administrators (PFAS) operating Programme Withdrawal (PW) while the National Insurance Commission (NICOM) monitors and regulates the activity of annuity insurance. Pensioners are paid regularly, Pensioners can migrate from one pension fund administrator to another when they are on programme withdrawal.
You are the Lagos sector Chairman of the NUPCPS, what prompted the establishment of your Union and what are your mandates?
As the Chairman of the NUP, CPS sector Lagos State, the reason for the establishment of the union was due to the way the retirees were being treated, for instance, five years after retirement retirees were not paid, there was serious delay in payment and this attitude by the Lagos State Government has sent a lot of retirees to their early grave. Many of them are battling with sickness such as stroke, cancer, diabetes and blood pressure. Some retirees are encountering problem of payment of their house rent, electricity bills among others. And the worst part of it was that government kept retirees in the dark. That is no information to retirees. We came as Union to give hope to our people.
As a result of all the aforementioned factors, God inspired me to go out to deliver the perishing retirees from our task master. That was what prompted me to seek for like minds to form an association to fight for the emancipation of Lagos State retirees. On the 30th January, 2019, we succeeded in forming an association called Association of Retirees and PFA Pensioners Lagos state chapter (ARPPELA). Later, the Association of Retirees was upgraded to Nigeria Union of Pensioners, Contributory Pension Scheme Lagos state sector by the NUP and inaugurated on 31st January, 2023. The national body of the NUPCPS also inaugurated the sector on February 5th during the 2024 NUPCPS National Conference led by the National Chairman Comrade Sylvanus Nwaiwu in Lagos. We have been taken directives from God who has been our sustenance.
The union mandates are:
i. To foster unity among the Contributory Pensioners.
ii. To eradicate delay in payment of Pensioners entitlement and encourage the Government to pay promptly.
iii. To ensure that PFA and Annuity service provider play their roles accordingly.
iv. To ensure that Pensioners enjoy the welfare packages in area of Transportation, Health and others.
v. To ensure that life after retirement is sweet.
What are the achievements of NUPCPS so far?
The achievements of the Union so far can be ascribed to God Almighty, , though it was tough ,the Union officials were intimidated and incarcerated by LASG at Criminals Investigation Department (Panti) for weeks but the Union was not bothered and we actually paid the price. We continue to wax stronger despite the stern opposition
i. Firstly, the Union made itself known by inauguration as NUPCPS Lagos State Sector.
ii. The union became whistle blower and involved in the defence of the interest of Lagos State retirees.
III, Accrued interest on our accrued right as at 2007 was agreed to be calculated to improve our monthly take home. It is awaiting implementation.
iv, All backlogs from 2020 , payment has started and ongoing ,it will be pay as you go in the next few months
iv. Another land slide victory the Union achieved was the petition written to the Lagos State House of Assembly on the deplorable condition of Lagos State retirees. Some recommendations for implementation of the Union demands were made possible.
v,. One of the recommendations of LSHA was the setting up of the Pensions Commissions board to regulate, control, evaluate and monitor pension commissions in accordance with section 24 of Lagos State Pension Reform Law 2015
vi, Henceforth, there shall be upward review of pension whenever there is increment in minimum wage or every five years (whichever comes first) in accordance with the provision of the relevant section of the 1999 constitution.
vii, The Union ensured that the enbloc retirees are called back for regular renumeration.
viii, We engaged in partnership with NGOs, philanthropist who made donations in form of palliative to our members, as well as office equipment among others.
ix The Union also involved in sensitization and inauguration of other CPS related branches e.g. Retired Tv and Radio Lagos, Lagos State University of Education Retired workers and parastatals who have been living on bailout from government.
x, We provided financial aid to our members that are terribly sick. Through this initiative we have been able to save many lives as a Union.
xi, We go to God to present our petitions at every quarter of the year with Wonderful testimonies. To God be the glory.
In a short while, Pension asset under management will hit 20 trillion naira with what is happening where some institutions of Government are seeking to withdraw from CPS. What do you have to say about the future of the scheme in Nigeria?
To me, the future of the scheme is bright once the Government can make a comprehensive review of the scheme and return the gratuity so that it will be in accordance with what is being practised in developed countries. Retirees in Chile where the scheme was borrowed, enjoyed all the fringe benefits, free medical care, free transportation, and enjoy a living wage. But in Nigeria, the reverse is the case for example under the CPS, a director in Lagos State Monthly Pension earns less than seventy thousand naira (#70,000) while some receive monthly salary pension not up to twelve thousand naira (#12,000), because of the unattractiveness of the scheme. That is why some institutions of Government are seeking to withdraw from CPS, e.g. the Military, House of Assembly workers, Permanent Secretaries of both the Federal and States of Nigeria. Those pulling out and those approving their pulling out are narrow minded people. We all should have waited to correct the ills together. I can assure you that by the time the ills are corrected, the runaways will run back.
There is also need to bridge the gap between the DBS and CPS. Our Union does not advocate for the scrapping of CPS but there is need for a comprehensive review in order for the pensioner to receive a living wage like their counterpart in the developed countries.
Pension Transitional Arrangement Directorate (PTAD) an agency established to ensure timely payment of pension to pensioners under the Defined Benefit Scheme (DBS) has just been scrapped and different people in different quarters have said so many things. As one who has been in the fore front in the struggle of ensuring the continue survival of CPS, if you were asked to advise on the issue of scrapping of (PTAD) what will you say?
The Pension Transitional Arrangement Directorate (PTAD) is an agent established by the Federal Government for prompt payment of DBS monthly salary and also for managing and directing the affairs of the DBS in order to make it efficient. But since the Federal Government decides to implement the Oronsanye’s report, in order to reduce some Government Agencies, that is the reason why it is being scrapped in order to cut the cost for Government expenditure and duplication of Government agencies.
In conclusion, the foundation of failure of the new Pension Scheme in Lagos State started when the retirees accrued benefit since 2007 were not credited into their Retirement Savings Account (RSA) like others in private sector. The template used in calculating the bond is poor as it cannot put food on our tables.
Government as a matter of facts cannot and should not deny or withdraw their responsibilities to the senior citizens who had laboured to build the state with their sweat and blood.
All over the world, senior citizens are cherished, respected and cared for throughout their lifetime. That is the reason why such countries are moving forward. We are the birds that laid the golden eggs, we appeal to the Federal Government, to let us enjoy the dividend of democracy as we all know that without yesterday, there cannot be today.
