Epunchng - Most read newspaper in Nigeria 13th-September-2017 - Page 18

editorial 18 WEDNESDAY, SEPTEMBER 13, 2017 Stop haphazard pension reforms C URIOUS amendments now going through the legislature threaten the gains achieved by the pension reforms. There are at least four bills now before the National Assembly seeking to amend the Pension Reform Act 2014. One seeks to increase the lump sum payment a contributor under the Contributory Pension Scheme can collect immediately after retirement from 25 per cent to 75 per cent. Another wants to remove the Nigeria Police, Nigeria Security and Civil Defence Corps, Nigerian Prisons Service, Nigeria Immigration Service, Nigeria Customs Service, and the Economic and Financial Crimes Commission. Already, Section 5 (a) of the law which repealed and replaced the Pension Reform Act 2004, had excised personnel of the Armed Forces and the intelligence/secret services from the CPS. The National Assembly should be cautious in handling these amendments. Pension reforms codified in the PRA were initiated in response to problems of epic magnitude in pension administration in the country. The Defined Benefits Scheme operated in the public service was unfunded, plagued by fraud, late or non-payment and left thousands of retirees unpaid, dying of hunger and in frequent, ill-organised verification assemblies. An interim report by the Pension Reform Task Team in 2014 said it recovered cash and assets worth over N1.63 trillion in less than two years, mostly from civil servants, their proxies and companies. Billions of naira are stolen each year, including pensions of police and military personnel. Even the head of the PRTT was accused of diverting billions. Many private sector employees were not captured in any pension scheme, leaving families and the society with the heavy burden of meeting the upkeep and health care needs of the elderly, a burden that taxes even the world’s richest countries. At federal, state and local government levels, funding pensions was not a priority; the government-run pension fund was also ruined by corruption. With reforms, however, the law provides for a CPS under which each contributor/employee would have a Retirement Savings Account into which a minimum of eight per cent of his or her monthly pay goes, while the employer contributes a minimum of 10 per cent. Total funds under the scheme that began in 2004 had reached N6.5 trillion by April this year, said the National Pension Commission. Lack of rigour was in evidence when the parliament debated two bills in May and August. Senators spoke of delays in pension payments, while representatives argued for the right of retirees to access 75 per cent of their individual Retirement Savings Accounts upon retirement or disengagement. Pension funds play an important role in any economy and are crucial in an emerging economy like ours that lacks any other social security safety net. It provides a secure pool of long-term investible funds at favourable interest rates that are otherwise lacking in Nigeria. Total assets of institutional pension funds in 22 major markets hit $36.4 trillion in 2016, according to Wills Towers Watson, a consultancy. When it comes to pension schemes, no civilised country puts all its eggs in one basket. Apart from other savings and investments, the United Kingdom operates broadly a two-tier pension system: a state pension everyone can access and private and workplace pensions, which take in all pensions that are not funded by the state. According to the BBC, there are two main non- contributory pension schemes for members of the regular armed forces in the UK. While the first gives a pension worth 48.5 per cent of what is called “representative pay” plus the lump sum, the second provides 50 per cent of final pensionable pay and a tax-free lump sum of three times annual pension. The pension accrues at a rate of 1/70th each year, for up to 40 years. Similar systems operate in the United States and France. In the US, for instance, the federal government administers several types of pension plans for its employees, including members of the military and civil service as well as disabled war veterans. But the most important pension system run by the government is the Social Security programme, which provides full benefits to working people who retire and apply for benefits at age 65 or older, or reduced benefits to those retiring and applying for benefits between the ages of 62 and 65. Nigeria’s N6.5 trillion funds mobilised under the PRA is unique for its efficiency and integrity, the only fund that corrupt treasury looters have B&VV&RFVFW"6f"f"vW&2B26FV"ǒf&b6fw2खfW7FVG2G&fR&GV7FB7&VFR'26VG&W0FWfFRV67&VFfGBRfW'7G&rV&&FPw2F&FV7BV62&VwV"V62V&R&WF&VBVFW&ǒW'62F&V7FfR67VW'2bvG2@6W'f6W2ff&BVF6&RB&VGV6R'W&FV2f֖ǐBFR7FFRR"6WfVVBbFRV6&Vf&22&VVFRFVWVVB&fW76Ɨ6V6vVVBFR6VG'FFǒF6R&VGFRBFVfV@&VVfG277FV&VBFRW&7bg&VGVVBV&Ɩ06W'fG2VFW&gVFrBVB'f&W0vfW&VG2F6RFR52vVB'd2@7WW'f6VB'V6&Fǒ7VffW"7V6'W6RbBV666VW2&RB77VW2F&RFG&W76V@&FǒVffV7FfR&Vf&6VB&fFPV6W'2vFFV6VBB6V7W&RV6vFRЧ&vrF67W762bFR&Vf&2VVBF&RVFW'FVvFVVW>( BVW'>( &W&W6VFFfW2gVǐffVBvFfWrF6WGFr7G&vVB'VW2F&WfV@'W6W27FffVVB&WV&VVG2FrVW'0&W76&Rf"&V֗GFr6G&'WF2FRF76V&ǒ6VBvWfW"BFRW2&6FFRFW'&&PBF2vW'26VBf&'FW'6vF7FVFW'2F7G&VwFV&VwVF27V62'6W V6VBf"VW'2FBfF&V֗BV6FVGV7F2d2"V6gVB7W7FF2FB'&VFR'VW2&f66VB&RFRFrFVGV7F@6W&6Rg&'F6Fr7FFRB6vfW&VG2F@fF&V֗Bv&W'>( 6G&'WF2WGFW'2VBf"F2vR6VBB&P&RFSv&G2rBRV@FV6v4V6r67V6WGFW'0W7B6Fw&FW.( 2gVW2@F2BFG&W72B&RGVBFV&RЧ76Rw&FW'2vW"6VBWGFW'2W"f&BFV6&&6rFPw&26V7F u&7TGU$R2RbFR6V7F'27B6V6FfRFFRVffV7G2b6&&V֗7666&FrFvW&( 0FǒFWFW&֖VB6G&'WF2VFW"'W6W722ЧW7V66V&b6&&V֗76w&7VGW&&GV7FfG6VBFV6ƖR&WGvVVB#RW"6VB'#6P'G2b'FW&vW&FRFV6ƖRVB&fV@w&7VGW&R6VB&R2V62SW"6VBF2GW&vVBVvFfVǒ7BFRw&72FW7F2&GV7B&VGV6rB'2V62BRW"6VB'#S6FǒFPw&7VGW&R6V7F"G6Vb26"6G&'WF"F6&&V֗76FW7FRFR&FB6&&V֗766FFFR6V7F"FR֖7G'bw&7VGW&R6VBFW&Vf&PFRFRVBFV6&&6rFR6V7F"FR֖7G'bw&7VGW&R6VBfW7BVfǒ&VGV7Fb7BЦ'fW7Bw&7VGW&76W2FR6VvRbFWVFP7F&vRB&6W76rf6ƗFW27W'&VFǒwVrFP6V7F"V2FBVvRVG2bw&7VGW&&GV6P'fW7FVBv&R7BfW7Fr7F&vRf6ƗFW2vVBF7&V6R&GV7FfGB7W7F&ƗG7Wǒ6r'fW7FVB7&2GVRF"7F&vRf6ƗGV2FBWFƗGv2&fFVB'FR7&2FW7FRFR6&&V֗76GW&rFR&GV7F&6W72bFP7BWFƗGvW&RF&R&W6VB&R6&&vVBfRF&RV֗GFVBF&VvFW"w&7VGW&&GV7F76R66WVVFǒ&frw&7VGW&7F&vRf6ƗFW2vBW7BR&R&GV6Rf&R'WBv6&VGV6P6&&V֗76g&FR6V7F"FV6&&6rFRw&7VGW&R6V7F"VF2FBFP֖7G'bw&7VGW&RW7BfW7Bw&f&W7G'&7F6rw&f&W7G'V2FBG&VW2v&R6VFV@f&֖r77FV2G&VW2&fFR6&&62FBvrv&VGV6rFR6&&FRF7W&RG&VPFr2fW'FVB7G&FVwF7GVƗ6Rr6&&FWfVVBbFRw&7VGW&R6V7F"G&VRFp&fW2&GV7FfG2BV2F&fRvFW"&WFVFখFR66VFrG&VRFrw&7VGW&77FV0&fFW2'GVGf"7&FfW'6f6Fv6v&fRFR6RbFRf&W"FRG&VW266&PW&VG&VW2v6fRV6֖2fVRgW'FW&&RFRG&VW2v6fR&VV6VFVBw&7VGW&77FV0v&fFR6FRf"f&2GW&rBvVFW"GFVBFFV6&&6RFR6V7F"6&WV&W2FP֖7G'bw&7VGW&RFfW7B&W67FBB&fV@f&WFW2B7V6W2b7&2B2VB@WG&VRvVFW"6FF2fRfW'VvFfR7@7&BVBW7G2BF6V6W26w&VFǐ&VGV6Rw&7VGW&VBFRVffV7BbF22&VGV7Fখ7&VB֖Ʋv6v&R&GV6VBFW7FRFP6&&FFRFB2&VVV֗GFVBGW&rFR&GV7F&6W72&fVB7&Bf&WFW26V@FW&Vf&R&RW6VBf"w&7VGW&&GV7FFW6P&fVBf&WFW26vF7FBWG&VRFVW&GW&W0BFW"'6Vf&VF6FF2FV"VBv&R&RvV6&VBFFRW72&W67FB7&2@7V6W2W6r&fVBf&WFW2B7V6W2VFBFR766FVB6&&V֗76GW&rFR&GV7F&6W722&VGV6VBFRfVFW&֖7G'bw&7VGW&RW7BfW7@76fVǒ&VWv&RVW&wFRf&ƗG`VW&w'W&f&6WGFVVG22W7VǒRbFRW6VvW2֖ƗFFrv7B7F&vRB&W6W'fF`f&&GV6RB2W&FfRf"w&7VGW&RF&VvFPG&6FF&VWv&RVW&wBVW&wVff6V76VBG&6FfW"FRVFVFW&2vB7G&FVwFfW&6RFRF6VvRbVvRf667B`&VWv&W2&WB&VrW726&&FV6fR&VWv&RVW&wv&VGV6RFRrFW&67Bb&fFrVV7G&6GFf&W'2&&FRf6rvFw26VB&PFWfVVBf"F2FVRf"w&W2bf&W'2&v6VB6W7FW'2FR֖7G'bw&7VGW&RW7BFRVЦGfFvRbFR&V6VFǒV6VBvW&w&VV&BFR֖7G'W7BV&&&V7G2FBVWBFPVW&wVff6V7F&vWBv&Fv&G2fbw&B6"VW&w2vV2r6&&w&7VGW&RV7W&rFB&V7G0VWBFW6R7&FW&vRBV6W"f"FR&V7G2 F&PgVFVB'FRvW&w&VV&BFR֖7G'6V@666FW"FrFFW&F6ƖFRf6pV662FRv&Vf&VBf6ƗG2fW'&VWfBFW&F6ƖFRf6RV66V@BFV6&&6rFRw&7VGW&R6V7F"B&fFW2w&G0f"w&7VGW&R6V7F"&V7G2&VWfBF&FfW'6G6ƖFR6vRBFVw&FFFW&FvFW'2RW"BW'67FVB&v2WFG2FR7V66ƖFR6vRgVB2FW&F6ƖFRf6PV66FBf6W2&V7G2&VFVBFw&7VGW&FFFFV6wG&6fW"66G'VFrVW&wBf&W7G'FrGfFvRbFRvW&w&VV&BFW&F6ƖFRf6RV662&VWv&PVW&wF2&fVB7&B7V6W2w&f&W7G'FVFB&VGV7Fb7Bֆ'fW7B76W06vrvFFV6&&6RFRw&7VGW&R6V7F"'F2VR'V3Sccb'F6VT&6WF6