Pensioners accuse PFAs of short-changing them

0
75

Matthew Otoijagha

Smarting from the pains and embarrassment of non-payment of their retirement benefits a year after; Federal Government retirees have accused Pension Fund Administrators (PFAs) of sabotaging the 2004 Contributory Pension Scheme.

They also took a swipe at the PFAs who are the custodians of the pensions contributed by civil servants before retirement, for flouting the directives of the National Pension Commission (PenCom), the regulatory body set up by government to supervise PFAs.

 The 2004 pension scheme is a fall-out of a major reform of the nation’s old pension system (Defined Benefit Scheme) that had sent hundreds of retired workers to their untimely graves because of unpaid years of backlog of gratuities and pensions.

To put an end to needless deaths of pensioners, particularly those in the queue to collect their benefits after serving their fatherland for 35 years, the Federal Government introduced the Contributory Pension Scheme. Under the scheme, the government deducts 7.5 per cent from workers’ salaries monthly and remits to the PFAs directly, while it contributes 7.5 per cent which it remits in arrears after workers’ retirement in form of “intervention.’’

For instance, the President Muhammadu Buhari administration had, in April 2017, released about N54 billion to PenCom to transfer to PFAs to settle arrears of gratuities and pensions for retirees of 2014, 2015, 2016 and 2017 and subsequently, monthly releases of some funds.

A pensioner, name withheld, who retired as a director in a federal government agency, got the greatest shock of his life when he visited a PFA — Nigerian Life and Provident Company at Anthony Village, Lagos, as he was paid only 17 per cent as gratuity instead of 40 per cent after 13 months he had retired.

According to him, he had planned to collect N7 million but was given N3 million, representing 17 per cent of his contributions and that of the federal government. The sobbing ex-director said in Lagos: “It was a financial shock and embarrassment to me after I had waited for 13 months to collect the money which I have planned for.

“When I noticed this, I approached the officials and I was informed that a `new circular’ has just emerged from PenCom.  According to them, the circular directed that only 17 per cent should be given to pensioners as lump sum (gratuity); this is painful.’’

He said his Retired Savings Account (RSA) statement from the PFA revealed that over N552, 000 was withdrawn by PenCom in January from his account. “Despite the fact that they (PFAs) invest our hard-earned money in business, they still deprived us of our money when we need it,’’ the pensioner, a journalist, said.

Another retiree, who left the service in November 2017 as a deputy director, also said that the delay in settling retirees’ gratuity and pensions had brought untold hardship and financial embarrassment to her. The woman, who retired from one of the River Basin Development Authorities, said: “We are hoping against hope that our PFA will soon invite us to come and collect our money.

“It has been extremely difficult to make ends meet with some of the children still in school, feeding and other expenses. “The contributory pension scheme is to ensure that a month after disengagement or retirement, a staff should be paid like in the private sector, but it is not so.

“It appears that we are back to the old pension scheme where people who have retired died without getting their money after 35 years in active service.  It is embarrassing and I plead with the National Assembly to amend the law setting up the contributory pension scheme to make it mandatory for PFAs to pay retirees a month after retirement.

 “The law should also make FG’s remittance to PenCom as first line charge on monthly basis not yearly or two or three years after.’’

LEAVE A REPLY

Please enter your comment!
Please enter your name here