By Hassan Usman
HOUSE of Representatives, at its plenary on Thursday, 30th March, 2017 resolved to summon the Minister of Finance, Kemi Adeosun, and Minister of Budget and National Planning, Udoma Udo Udoma, to appear before it in plenary on Thursday 6th April, 2017 to tell the House and Nigerians how the Federal Government intends to defray and exit its multi-billion naira pension liabilities and give succour to pensioners.
The resolution was sequel to a motion moved by the Chairman, House Committee on Pension, Hon. Shakarau Abubakar (APC, Kaduna). Coming under Matter of Urgent National Importance, Hon. Abubakar, said the accumulated pension liabilities of the FG, which he put at about N280 billion Naira for Contributory Pension Scheme, CPS, and N174 billion for the Defined Benefit Scheme, DBS, had caused untold hardship to pensioners.
Instructively, the resolution came on the heels of the meeting between the Speaker of the House of Representatives, Rt. Hon. Yakubu Dogara, and the Nigeria Union of Pensioners, NUP, which had stormed his office on a Save Our Soul, SOS, visit a day earlier. The National President of the NUP, Dr. Abel Afolayan, told the Speaker that NUP had empirical proofs to show that the 2017 Appropriation Bill did not provide sufficient funds to offset FG’s pension liabilities.
This must have to do with the House resolution of 22nd March 2017, mandating the Speaker and leadership of the House to, among other things, liaise with the Senate leadership, to get the buy-in and cooperation of the Executive in general and Mr. President in particular to provide the required funds in the 2017 Budget, or provide emergency bailout funds to redeem all FG pension liabilities.
Likewise, the Senate had also on 28th March 2017 resolved to urge President Muhammadu Buhari to approve bailout to clear the FG’s N174 billion pension liabilities to retirees under the DBS, as well as over N280 billion being FG’s unremitted funds to the CPS in line with the Pension Reform Act, 2004. The Senate said unless the FG cleared its outstanding obligations to the CPS, the CPS may collapse.
The Senate, in the motion by Senator Emmanuel Paulker, expressed worries that although the FG had severally released bailout funds to states to pay outstanding workers’ salaries, it was yet to clear the pension liabilities in question, which is FG’s primary responsibility. One cannot agree more with the National Assembly on the urgency of clearing the FG’s pension indebtedness.
There is no doubt that the lot of pensioners and nation’s pension system in general have witnessed tremendous improvement since the coming into force of the Pension Reform Act (PRA) 2004, now PRA 2014. For instance, the PRA 2014 has extensively eliminated the frauds, such as ghost pensioners, that used to be the order of the day in the old system by properly establishing the Pension Transitional Arrangement Department , PTAD, to ensure that only real pensioners get paid and directly too.
Unlike the DBS, which unrealistically promised workers gratuities and lifelong pension, but only ended up sending them to their untimely deaths, the CPS has made retirement something workers look forward to with some sense of hope and happiness. It is noteworthy that there has never been a single recorded fraud or corruption in the CPS regime. From a deficit of N2 trillion inherited at the inception of the CPS, the nation’s pension asset is nearing N7 trillion.
So, if there is anything successive governments have sustainably nurtured to international repute since the days of former President Olusegun Obasanjo, it is clearly the pension industry reform, especially the CPS. It will therefore be unfortunate if doubts begin to creep into the system or it collapses by the FG’s own making.
For instance, facts from PenCom’s presentation before the Joint Appropriation Committee of the Nation Assembly, showed that whereas the sum of N93.067,441,000.00 was requested in the 2014 budget to settle pension liabilities under the CPS, only the sum of N30,582,553,824.00 was approved. This amounted to a shortfall of 62,484,887,175.00.
Also, whereas the FG CPS liabilities for the year 2015 was N98,705,155,450.00, N60,251,158,884.00 was appropriated, resulting in N38,453,996,566.00 deficit.
In the 2016 Appropriation Bill, a provision of N91,914,899,000.00 was needed, but the Budget Office proposed only N50,195,808,918.00 to the National Assembly, resulting in a N41,719,090,082.00 shortfall. Even at that, of the N50,195,808,918.00 requested by the Budget Office and graciously approved by the National Assembly, only N18,823,428,342.00 (being mandates for four and half months) was actually released, while mandates for seven and half months, totaling N31,372,380,576.00, were not cash-backed and released.
Obviously, the problem, as rightly pointed out by Hon. Toby Okechukwu, while contributing to the debate by the House of Representatives on the matter, is the failure of the FG to see and treat its pension financial statutory obligations as Recurrent Expenditures. The FG rather treats it as Capital Expenditure, where you can fund projects in installments over the years, forgetting that pensions are people’s livelihoods, their salaries after sacrificing their primes by way of service to fatherland. To under-finance FG’s pension obligations, is, therefore to ask the senior citizens and their dependents to go without food, shelter, medication and so on.
This naturally leads to integrity deficit in the public and private sector. As the Speaker rightly pointed out during his meeting with the pensioners, anti-corruption and poor welfare of pensioners cannot go hand-in-hand. Like the Speaker too, I prefer to believe that President Buhari, himself a pensioner, probably does not have the full details of the ugly situation
However, now that he knows; now that the Hon. Ministers of Finance and Budget and National Planning have been summoned to appear before the House of Representatives, Nigerians expect them go into a serious meeting with Mr. President. We expect them and the President to brainstorm on the way out of this embarrassment- be it bailouts or adequate provisions in the 2017 budget? Whichever it is, Nigerians expect the Ministers to come before the Reps with practical and urgent solutions. A worker is deserving of his wages and a retiree his pension benefits.
*Mr. Usman, a public affairs commentator, wrote from Abuja.