PENSION: The Dilemma of Retirees


The event was a modest send-forth party to honour new retirees from the public service. After serving the nation to the retirement age, some of them still looked radiant while others were haggard as everyone at the occasion poured genuine encomiums on their uprightness and sense of brotherhood. They held several positions of responsibility, some of which were sensitive to the nation’s political economy. In fact most of them were epitomes of patriotism, loyalty and dedication as they served their fatherland diligently without demeaning their integrity.

When it came to their response they narrated their experiences in the service and in an emotion laden voice, they passionately appealed and prayed for prompt payment of their gratuity and pension. The young workers at the ceremony were moved and really scared of what may befall them in the near future knowing how some pensioners were abandoned to abject poverty and humiliation to death after their meritorious service to the nation.

Most of pensioners in financial dilemma had served in the civil service, academic environment, teaching profession, railways and forces (military and paramilitary). The pauperization of those retirees is quite unfortunate if we recall that those were the people who taught and mould generations of leaders, formulated and guided our economic policies, designed and developed our institutions and staked their lives to keep the nation united. The emerging private-sector driven economy has largely depended on their services. For instance, the retirees during their service years were involved in the registration of businesses, issuance of different kinds of licences/approvals, provision of services, supervised supplies and contract executions while those of them in the military and paramilitary services provided adequate security to lives and properties.

Yet apart from providing those services and security for the advancement of our nation, some of the retirees were never recognized and died unsung. In an iniquitous assessment, a section of the society scornfully bashes the living retirees by insisting that the reward of a teacher is in heaven, that the retired service personnel has no right to contest for public office and that a civil servant is corrupt.

It is the survivalist instincts in some of the retirees that with beggarly dispositions, they move about establishments soliciting for assistance or searching for degrading menial works even brandishing their qualifications and experiences to win sympathy. Apart from those who become burdens to their grandchildren, the worst are those on the streets with stretch palms pleading for alms in most ridiculous manner.

This pathetic societal scandal has always been rampant amongst those who served in the public service. The fear of unknown after retirement coupled with outdated condition of service that didn’t encourage savings and other profitable activities, compelled the smartly intelligent or crookest minds to engage in unethical practices to guard themselves against indignity of penury in perpetuity after the service.

The good news however is that the gory sights of the malnourished and aged pensioners who are wheeled-barrow on the queue to collect stipends that may not adequately cater for their medication, is coming to an end with the positive development in new pension administration in Nigeria. When President Obasanjo inaugurated the National Pension Commission (PenCom) on December 15, 2004 some skeptics would have brushed it aside as an agency for the “boys.” The Commission has within the short span of its existence put the critics wrong as it has demonstrated its commitment to correct the wrongs of the past in the pension administration in more matured and professional manner.

Interestingly the Commission in its two years of its existence is more concerned in wooing the patronages of stakeholders through its transparent procedures, consultative dialogues and public enlightenment than enforcing compliance, which is one of its powers in the Pension Act. In one of its seminar on Private Equity and Entrepreneurship, its Director General, Mr. Muhammad Kabir Ahmad disclosed that the amount of pension funds in custody was about N600 billion. He disclosed further that under the contributory pension scheme, which came into being through the Pension Reforms Act 2004, the FG and multinational companies as well as big institutions have been remitting funds regularly to the Pension Funds Administrators (PFAs).

The scheme works in a simple way where workers monitor their contribution closely for rainy days as they have the right to choose their Pension Fund Administrators. Each worker is expected to open Retirement Saving Account (RSA) from where he receives a pin number with a Pension Fund Custodian (PFC) that collects a percentage of the worker’s contribution for onward lodgement with a pension administrator for proper investment. On retirement the pensioner can easily access his pension fund without the hiccup of the past.

The worker’s contribution is a predetermined percentage of his monthly emolument as employee and from his organization as employer. It comes in two folds: minimum of seven and half percentage from him as employee and similar minimum amount from the employer making a total of 15% monthly contribution except in the military service where its member contributes two and half percent and 12.5% from the authority. These are the contributions that are wisely invested on behalf of a worker which earns interest or profit as the case may be. Most of the developed nations and even South Africa have utilized the huge deposit provided by pension funds to boost their economic activities and strengthen the purchasing power of pensioners who live like king after retirement apart from providing welfare packages to aged citizens who never worked in pensionable organisations.

While the new pension scheme encourages savings, it has a lot of advantages and potentials for higher benefit than the previous arrangements as the return on investment is largely dependent on numbers of indices that include economic growth, minimum pension guarantee and the investment expertise of the individual’s PFA.

To allay the fear that only future retirees in the next few years would be the major beneficiaries of the new scheme, the Federal Government recently commenced payment of pension arrears with over N1 billion paid throughout the federation in few days of the exercise. At a ceremony to flag-off the exercise conducted by the Minister of Finance, Mrs. Nenadi Esther Usman, 332 pensioners were said to have received N320 million. The highest paid pensioner went home with N6 million while the lowest paid received N500,000. So far about N15 billion has been paid out to pensioners in a continual exercise.

With the success of the scheme at the Federal level through the diligence of PenCom management, it has also received the endorsement of governors for its extension to states and local government councils. A draft bill to be presented by governors to their respective legislative houses was adopted at one of the meetings of the Council of States at the Presidential Villa, Abuja. It is hopeful that the passionate prayers of the Nigerian pensioners may afterall be a reality while they are still alive.

This article by Yushau A. Shuaib was originally published in Thisday November 10, New Nigerian November 10, The Companion November 10, Sunday Trust November 12, Leadership November 13, Daily Trust (BP) November 13, Nigerian Tribune November 23, 2006, Economic Confidential January and Daily Independent January 1, 2007

About the author


Yushau A. Shuaib is an award winning public relation professional. He is popularly called Idiagbon during his university days, He has distinguished himself with several credible awards in the field of public relations. Notable amongst them are Campus Writer of the year, Alhaji Sabo Mohammed Best Student in Public Relations, Delta State NYSC Merit Award, Automatic Scholarship for the Best Corps Writer, Head of State National NYSC Honours Award, NIPR Public Relations Person of the year in Kano/Jigawa State and the Young Achiever of the year from a Business, among others

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