The Punch Newspaper based in
Lagos Nigeria has reported on Wednesday 15 January 2014 that the Nigerian
Federal Government plans to create a new Pension Fund Administrator for the
management of the Retirement Savings Account of the Nigeria Police Force.
This development came as a
response to the agitation of the Force to pull out of the National Pension
Commission also known as PenCom which is mandated the Pension Reform Act, 2004
to administer the pension all Federal Government Ministries, Departments,
Agencies and related organizations.
The Act created a system of
contributory pension system where an employee would contribute a minimum of
7.5% of his or her salary with her employer contributing the same amount to the
fund to be kept in a Retirement Savings Account to be managed by professional
pension fund administrators called PFAs.
At the onset, all Federal
Government ministries, departments and agencies including the Military and
paramilitary organizations were all managed through the operations of the
PenCom.
However, within the first
eight years of its existence, the operations of the Commission were muddied by
earth-shaking fraud where a few people were able to steal several billions of
Naira with one man associated with the Police Pension Funds stealing as much as
Twenty-three Billion Naira (N23Billion).
These developments led to
the three arms of the Nigerian military – Army, Air- Force and Navy - and the
State Security Service pulling out of the system to set up their own Pension
Administrations.
The Nigeria Police Force
tried to follow suit but this was stalled by the PenCom for fear that another
pull out may lead to all other departments and agencies pulling out and thereby
collapsing the Reform Act.
The Pension Reform Act, 2004
is actually a saving grace for Nigerian civil servants who after working for 35
years have a hard time accessing their pensions and gratuity due to large scale
fraud. The Pension Reform Act, 2004 puts
the funds contributed by the employee and employer in a savings account in the
name of the employee kept by Pension Fund Administrators in reputable banks
engaged as part of the process as Fund Custodians.
For the few years it has
operated, retiring civil and public servants are able to access their lump-sum
initial payment as soon as they exit paid employment and also start immediately
to get the monthly payout.
The Police and other
agencies and departments fear that with the nature of fraud already happening,
they may be returning to the status quo where retired officers are not able to
access their pension and gratuity sometimes until they die.
Good as the Pension Reform
Act, 2004 could be, my conclusion is that it is not the El Dorado. And don’t get me wrong, the PRA 2004 is a
great advancement and a wonderful departure from the dreadful situation of
retirees in Nigeria before the Act. The
main problem with the old system of retirement administration has more to do
with corruption than lack of money to pay the retirees.
As we can see from the
burgeoning fraudulence of the human elements in the management of people’s
savings in the reform Act, you can agree with me that the real solution to the
problem is that people, especially those in paid employment, should take
personal responsibility for their retirement planning and execution.
The Retirement Savings
Accounts system should be maintained by all employees. However, for a secure and happy retirement
life, people should go far beyond Retirement Savings Accounts system.
Many of us would retire
after 35 years of service or 60 years of age and discover that we still have
dreams, stamina and desire to achieve more.
All of these would become pain of hell for us unless we planned our
retirement properly, executed programmes and projects both for early retirement
and entrepreneurship.
If you wish to learn how to
plan and execute an early retirement programme or you wish to prepare yourself
for a worthwhile retirement life experience with enough income to ensure that
you take care of all your dreams and aspirations, read my two books – “Retire Early To Wealth And
Fame” and “Why, When
and How To Start Business While Working Full Time”. Call me +2348178008112 or email successpublishersng@gmail.com
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