By Victor Ahiuma-Young

SINCE N5 billion  was slashed from the provisions of Pension Redemption Fund and the public service wage adjustment by the National Assembly before passing the 2018 Appropriation Bill, it has been pain, anger, sadness, frustration and disappointment for  retired federal public servants, next of kin of deceased public servants and indeed, stakeholders in the pension management sector.

Federal Government pensioners who were excited by  President Muhammadu Buhari’s  intention  to  remedy some of the issues noticed in the budget passed by the National Assembly, have pleaded with him to step up the process of a supplementary budget to ensure that benefits are paid without further delay.

Spirit behind pension reform

Ivor Takor,  a Legal Practitioner and Executive Director, Centre For Pension Rights Advocacy, CPRA, said: “The failure to pay retirement benefits including death claims as and when due is at the heart of the public sector pension crisis in Nigeria.

The cause being the irregular settlement of accrued pension liabilities of the Federal Government because of inadequate funding of the Federal Government Retirement Benefit Bond Redemption Fund account with the Central Bank of Nigeria and death claims of deceased federal public servants. Payment of retirement benefits to retired federal public servants and death claims are made in batches only whenever funds are released for the purpose.

“This is contrary to the spirit behind  pension reform, whose objective as stated in section 1 (c) of the Pension Reform Act 2014, is to ensure that every person who worked in  the Federal Civil Service, Federal Capital Territory, states and local governments or the private sector, receives his retirement benefits as and when due.

Consequently, the passing of the annual budget by the National Assembly is something that is expected to bring relief and joy to those who are on the line awaiting payment. It’s therefore understandable that the revelation by President Buhari during the 2018 budget signing ritual, on Wednesday 20 June 2018, that the sum of  N5 billion  was slashed from the provisions of Pension Redemption Fund and public service wage adjustment by  National Assembly before passing the 2018 Appropriation Bill, brought pain, anger, sadness, frustration and disappointment to retired federal public servants, next of kin of deceased public servants and indeed stakeholders in the pension management sector.”

Takor who is also a retiree of a Federal Government agency, contended that the Act also provided   among others that  “the Budget Office of the Federation on receipt of the advice from the Commission shall ensure adequate appropriation for the shortfall and subsequent payment. The amount in the redemption fund shall be used by the Central Bank of Nigeria, as prescribed by the Commission, to redeem any retirement benefit bonds issued pursuant to section 15(1)(a) of the Act. Unfortunately, successive governments failed to adequately fund the Federal Government Retirement Benefits Bond Redemption Fund from where accrued pension rights of employees are redeemed. It is therefore sad that the National Assembly, to whom retirees have always been complaining  over the non-payment of their benefits, has slashed budgetary allocation for payment of retirees.

“We concede that the Constitution gives the National Assembly powers to scrutinise and approve budget proposals laid before it by the executive arm of government and in that process, the Assembly is not expected to rubber-stamp whatever is laid before it and return same to the executive arm. However, in “satiating this constitutional obligation, members should have at the back of their minds that  pensions are actual liabilities of government and not just estimates; therefore they require little or no alterations.”

“Mr President did say that all the issues raised notwithstanding, he signed the 2018 Budget in order not to further slow down the pace of recovery of the  economy, which has doubtlessly been affected by the delay in passing the budget. I also  hasten to add that it will help to reduce the suffering of retirees and relations of deceased public servants if the money so appropriated for the payment of their benefits is released on time. It is also heart-warming, when the President said he intends to seek remedy for some of the issues he raised through a supplementary and/or amendment to the budget which he hopes the National Assembly will expeditiously consider. Mr President should in line with the spirit of his pronouncement, cause to be laid before the National Assembly, a supplementary and/or amendment to the budget, to remedy some of the issues he raised including the N5 billion slashed from the provisions of Federal Government Retirement Benefit Bond Redemption Fund and Public Service Wage Adjustment. In the interest of retirees and families of deceased public servants, the National Assembly should expeditiously consider the request.”