Retirees die of hunger three decades after serving Nigeria

…FG owes N250bn pensions as at May 2024

Yomi Gbadamosi regrets spending his whole adult life working in the federal civil service and retiring after 30 years. He feels he wasted his life for Nigeria. After retiring from service, he has had to wait for pensions for almost two years.

Right now, putting food on his table has become an almost impossible task.

He feels deeply pained whenever he remembers that his friends who left school with him and ventured into business or private enterprises are comfortable and earn from their investments, without having to wait on anybody for pensions.

“This is really not the Nigeria I thought I was serving,” regretted Gbadamosi.

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For Mabel Adarabioyo, who retired in 2021 after working in the federal civil service for 30 years, the situation is the same. She was posted from Abuja to Benue to serve Nigeria for over 10 years amid uncertainties.

She abandoned her Abuja home, worked and retired in Benue, but she has not received her pension after three years.

“It is tough to work for the government and tougher to work for the government in Nigeria,” Adarabioyo, 63, a physics expert, said.

For Gbadamosi, Adarabioyo and hundreds of retirees of Federal Government Treasury-Funded Ministries, Departments And Agencies (MDAS), who retired between 2020 and now, it has been pains and agony.

While this is not their own fault or that of their Pension Fund Administrators (PFAs), it is because the Federal Government MDAs, who are their employers, are yet to pay their pension accrued rights to enable their PFAs compute and start paying them.

‘Accrued rights’ refer to the pension benefits that employees of the Federal Government Treasury Funded Ministries, Departments and Agencies (MDAs) are entitled to, based on their service years before the commencement of the Contributory Pension Scheme (CPS) in 2004.

Ugwu Oluwakemi, managing director/CEO, Nigerian University Pension Management Company Limited (NUPEMCO), explaining the challenges of accrued rights to Nigerian lawmakers recently, said PFAs are unable to compute and pay retirement benefits immediately after retirement because of unpaid accrued rights of affected employees.

“Despite the balances in the Retirement Savings Account (RSA) of the retirees, the PFAs are unable to pay because of Section 2.3 of the Revised Regulation on the Administration of Retirement/Terminal Benefits,” Oluwakemi said.

The regulation, she noted, states that the components of an RSA at retirement shall include: accrued pension rights or pre-act benefits (if any) for employees who were in employment before the commencement of the CPS, employer/employee pension contributions, returns on investment, and the fixed portion of voluntary contributions (if any).

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Oluwakemi said, “This is giving bad publicity to the pension industry since retirees are not fully aware of Section 2.3 of the Pension Reform Act 2014. They assume the PFAs intentionally do not want to pay them.”

Gbadamosi, now 62, who visited his PFA’s head office in Lagos recently, lamented the delay in the payment of his pensions after leaving service in 2022, expressing regret that he worked with the Abuja-based ministry.

He said, “My regret is not that I served my country really, but that I cannot feed myself and buy my medications two years after leaving employment.

“Sometimes, I have to rely on my children to buy my medications or eat what I want,” he said.

He said many of his colleagues with whom he left employment together and do not have children or relatives to take care of them are dying of hunger and frustration.

He said this is one of the reasons why workers indulge in corruption in the civil service, particularly when they cannot be sure of their tomorrow.

A chief executive officer of one of the PFAs, who asked not to be mentioned, said: “There’s a significant pressure on PFAs as the economic climate is not friendly and people need their funds, especially retirees, knowing there’s no guaranteed monthly income like before.”

The CEO said if the reconciliation for contributors from the public sector could be faster or done earlier, say in 12-18 months before retirement, retirees’ clearance process will commence in earnest to avoid delays at retirement.

He advised the Federal Government to earmark funds and channel them to respective ministries or the Budget Office of the Federation for timely release of the required allocation.

The Federal Government, earlier in July 2024, ordered the computation of accrued pensions of serving federal civil servants.

A memo by the Office of the Head of Civil Service of the Federation, released recently in Abuja, said the move was in collaboration with the Ministry of Finance and would focus on employees who were employed on or before June 30, 2024.

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The memo said the move would enable the government to plan ahead of time towards the early release of the entitlements of the workers.

The memo read, “It has been observed that one of the reasons for the delay in the payment of pension of retired officers is the late release of their accrued rights under the old Defined Benefit Scheme.

“To enable the government plan towards early release of the accrued rights, there is a need to harvest the data of the officers who are entitled to the rights.

“Consequently, the Office of the Head of the Civil Service of the Federation, in collaboration with the Federal Ministry of Finance and other stakeholders, is compiling data of the affected officers who were employed on or before 30th June 2004.

“All concerned officers are to note that filling the form is mandatory to enable the payment of their accrued pension rights under the old Defined Benefit Pension Scheme, when they retire,” the memo said.

Industry analysts say the Federal Government’s total indebtedness on accrued rights up the month of May 2024 was estimated to be about N250 billion, covering about 18 months.

Reports say that the Federal Government last paid accrued pensions in 2022 when it released N13.89 billion covering a four-month payment period.

According to a report by the National Pension Commission (PenCom), the FG released a total of N100.29 billion for the payment of accrued rights in 2021, which brought the total amount released by the FG from inception to N980.18 billion.

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Analysts fear that the delay in the release of funds for the payment of accrued rights may linger as the provision for pensions, gratuities and retirees benefits in the 2024 Appropriation Act declined by 21.3 per cent to N673.01 billion from N854.81 billion in 2023.