Our pension scheme pauperizes workers at retirement — NLC
Nigeria Labour Congress, NLC, has raised the alarm, claiming the present pension scheme is pauperising workers at retirement.
According to NLC, retirement under the present scheme may have become a death sentence for many retirees and this has many consequences for behaviour of workers in active service.
President of NLC, Joe Ajaero, who raised the alarm in a remark at a retirement summit in Abuja, with the theme “Challenges, Strategies, Prospects and Opportunities at Retirement in Nigeria”, faulted the alleged over N360 billion pension arrears owed by the federal government to its retirees.
He said “The pension scheme, as it currently stands in Nigeria, unfortunately falls short of its fundamental purpose; to provide for workers in their old age. The medium for storing Pensions which is the Naira has maintained an unstable value and has kept depreciating over the years. It is only a stable platform that can truly serve as a solid store of value that can sufficiently maintain the value of contributions when workers retire.
“Pensions are meant to offer security and peace of mind, ensuring that retirees can enjoy their golden years without financial stress and in good health. However, the reality for many of us is starkly different.
“It is worrying that most of retired members encounter not just health challenges but many others leading to untimely deaths because of the character and nature of our Pension scheme which pauperises them financially at retirement.
“Retirement under the present scheme may therefore become a death sentence for many and this has many consequences for behaviour of workers in active service.
”The federal government it is alleged owes nearly N260 billion in pension arrears, with federal parastatals accounting for an additional N40 billion. Some states have arrears stretching up to eight years. In the private sector, reports indicate that many companies are in arrears of up to three years, deducting contributions from workers’ salaries without remitting them to the respective Pension Fund Administrators (PFAs).
“In 2021, PENCOM according to its fourth quarter 2021 report, appointed recovery agents realised from 36 defaulting employers N984.23 million, representing N406.42 million as principal contribution and N577.87 million as penalty. The Micro-Pensions designed for the informal sector remain inadequately activated, further complicating the financial security of our informal economy workers.
”The non-contributory Pensions funds are still subject to severe lootings by those who are supposed to manage them without consequences. The Maina and the former Accountant General issues are still very fresh in our minds.
“As usual, people get away with all manners of mind-boggling heist in our nation. We had wished that the various statutory agencies saddled with the responsibility of protecting workers are alive to their responsibilities. These challenges create an atmosphere of fear and uncertainty for the average worker approaching retirement in Nigeria.”
