By  Funmi  Komolafe &  Victor Ahiuma- Young

Recently, the military hierarchy  began to make a case for the  withdrawal  of military men from the barely six years old  Contributory Pension Scheme, CPS,  introduced by the government of President Olusegun Obasanjo,  a retired general of the Nigerian Army.

To achieve this objective, a bill for the amendment of the Pension Reform ACT 2004 has been forwarded to the National Assembly.  In line with democratic practices, the National Assembly conducted a public hearing on  the issue. Pension and You  shares with readers different perspectives on the issue.

First it is necessary to remind all that the Pension Reform Act was  initiated to put an end to abject poverty to which many pensioners  experienced as a result of the  failure of government to honour its pension obligations regularly.

Those were the days when  frail, hungry and angry pensioners littered  our major streets  sleeping under flyovers with mattress that  were bugs  infested with the flyovers turned into kitchens with stoves that were meant for the dustbins.

It was  a national shame.
It therefore did not come as a surprise  when the Nigeria Labour Congress in its presentation before the Joint Committees of the National Assembly on pension recalled,   “ The Nigerian  pension administration reached a crisis situation with senior citizens  who had served this country meritoriously  and were no longer useful to themselves, especially in the public sector,  retiring without any hope  of being paid  their gratuities  or monthly pension.   It became a national disgrace  to see retired military personnel of other ranks  sleeping on streets and public places in Lagos and Abuja waiting for the payment  of their pension.  The private sector did not fare better”.

THE Amendment Bill:

“The amendment being sought by the Bill under reference  is to insert immediately      after  the figure “291”  in S.8 (2) of the Pension Reform Act 2004, the phrase  “and members of the Armed Forces of the Federation in sections 217 and 318 (h)”. The effect of the amendment is to include  the Military in  the list of category of persons exempted  by the Act from the Contributory Pension Scheme, such as Judicial Officers”.

So, why do the proponents of this bill want it?

As stated  in the memorandum to the Bill, “the exemption of the military seeks to “eliminate the problems associated with the Contributory Pension Scheme as it concerns  military personnel”

The  problems were identified as : delay in the payment of entitlements, disparity in the lump sum paid to the personnel of the same rank, low monthly pension being paid to retired personnel, glaring differences between the old and new system of pension administration

Essentially, the major point of those who want this bill passed is that the “military should not contribute under the Contributory Pension Scheme”. To date however, there is no confirmation that the military hierarchy pushing for this bill made consultations with the other ranks. Those who slept under the bridges were not retired generals or officers.  They were  soldiers of other ranks. Indeed, however, there may be soldiers of  other ranks who see their contributions to the scheme as  an unnecessary deduction from their salaries.  This however is at best short sighted.

One recalls that during the public hearing on the pension reform bill in 2004, the position of the NLC was that given the sacrifice that the military makes for the  nation, their contribution should be solely funded by the federal government.  The National Assembly rejected NLC’s proposal.

…NLC cautions on amendment

NIGERIA Labour Congress, NLC, has  said it “believes  that the proposed exemption  of the military if passed through will trigger a whole lot of unintended and undesired reactions  that will undermine  the sanity that the Contributory Pension Scheme has brought into pension administration in this country.”

NLC adduced the following reasons .  First, it stated, “ It is absolutely correct and recognised that  the military renders special public service.  However, there are other arms of the public service  that also renders special  services”. For instance, NLC stated, “ If the military is exempted, the para- military ( Customs,  Police, Immigration and Prisons ) staff  will  also want to be exempted.

Also, “the police whose duties are equally challenging  in keeping law and order  and protecting  the lives and properties of other citizens will also seek for exemption.  Not only will the public servants also agitate for the abolition of the Contributory  Pension Scheme, workers in the private sector who  have  grudgingly bought into the scheme will renew  their agitation for exemption as they did in the beginning of the scheme”.

If this bill is passed, what next? The NLC asked “If the military exits from the  contributory pension scheme, the question are  which scheme will they belong to?

Arguing that the withdrawal would in the long term not be of  benefit to the majority of soldiers stated emphatically, ”  We reject their going back to the era where our respected senior citizens who spent their life in protecting  the territorial integrity of this country returning to the life of sleeping in the cold on streets of major cities seeking to be paid their rightful entitlement”

NLC acknowledged that certain judicial officers are exempted from the CPS, “these categories of officers  retire between age 65 and 70 and as a matter of policy or law , they are not permitted to practise  their profession on retirement.  The number of those involved is manageable and will remain so.  This we know is not the case with the military”. The Central Labour Organisation reminded the legislators that “this law was put in place at a time when the  then President came from the constituency  of the military and he is a man of in-depth knowledge of the duties and welfare of his colleagues”.

Who will  regulate the military pension scheme?

This is another issue which the amendment bill has not addressed but the NLC raised this during the public hearing. NLC stated, “The issue of regulation of any industry has become an issue of global discourse in the aftermath of the financial meltdown.   We have witnessed the effect of lack of effective regulation in  several sectors of our financial economy especially  the banking and stock markets.

No organisation can regulate itself.  The National  Pension Commission has been given the role to   regulate  the pension industry in the Pension Reform Act.  The Commission is effectively carrying out  regulatory and supervisory  activities  which are risk-based  with particular emphasis on issuance of  guidelines and regulations; surveillance of licensed operators; compliance and enforcement ; and supervision of investment of pension funds assets.  To take military pension out of this regulatory and supervisory control is to take it from protection to the uncertainty .

What to do —NLC

The NLC noted that  if the National Assembly” is to address the issue of appropriate remuneration or even compensation for the military, it should be done in such a way  and manner that  it will not put the administration of the   retirement  life of our senior  citizens in jeopardy.|

It therefore suggested, “That the Government can opt to make full contribution for the military as against the current percentage  of contributions for the military, even though this will be regarded as an increase in salary.

The second option is that the government can put in place a separate lump sum gratuity benefit  for the military without disturbing the current  Contributory Pension Scheme.  Whatever is in their  Retirement Savings Account should then be used for pension”.

In conclusion, NLC suggested, “We should collectively look for ways and means of entrenching  the Contributory Pension Scheme because of its great potential as social safety net in this country.  We should therefore either individually or collectively desist from taking any decision that will throw the pension industry into chaos”.