The crisis in the Nigerian pension scheme can be best appreciated when one has a graphic view of the inhuman and highly degrading conditions pensioners have been subjected to. It is either a case of non-payment of pensions and gratuity, or the creation of undue bottlenecks to frustrate and kill pensioners. They are constantly to go for worthless “identification parades”, and “verification exercises”, tortured in long queues, receive insults from dubious government officials or their servants, etc. The following examples show what the situation is.
Prof. Adeyinka, 69 (not real name), had been a lecturer and researcher for over thirty-five years at the Obafemi Awolowo University. He retired in 1996, and to this day, July 2004, he is yet to collect his gratuity, and since then, he has only collected six months of pensions. It sounds unbelievable but it is very true; this is the plight of hundreds of retirees from that university. He and others have refused to vacate their official residence in the university campus in spite of various threats from the university management who refused to pay their benefits.
Their arguments are very justified and legitimate; since the university owes them, they would not leave. However, the evil minds of the management, which have been working overtime, have now increased their rent by hundreds of percent and backdated it. This is not only to force them out of the residence but also to cancel out their pensions!
This is the plight of university professors and other university staff, not just in OAU but for most retirees in Nigeria. These people have put in decades, a better part of their lives, in service. Pensioners have been forced to form associations to follow up their benefits, which are not coming.
In the case of Prof. Adeyinka, due to his age and physical weakness, he has to seek the help of his former student (who is now a lecturer) to assist him in the process of collecting his pension, a process that has been taking place for the past eight years with no end in sight.
Outside the quiet intellectual environment, the plight of pensioners are much more brutal. It can be justifiably concluded that it is a crime to be a pensioner and to grow old.
The mother of the author of this article is owed months of pension by the Lagos State government; the last time they received anything from the government was in December 2003, and this was a part payment; a form of debt servicing. Millions of pensioners are owed months or years of pension. Tens of thousands of pensioners have died in the process of waiting for their pensions!
The tales of woe could be a document that fills volumes of books. The story is the same for ten of thousands of retired military personnel. The brutality of the government or employers is on the same level. There are no pension schemes in most of the Nigerian private sector.
It is officially acknowledged by the NLC that a whopping N3 trillion (about $23 billion) is owed Nigerian pensioners by the government. These were consciously accumulated over the years by the various regimes. Unfortunately for Nigerian pensioners, they are not the World Bank/IMF, foreign banks, big contractors, Generals, multinational corporations, etc, because there are more commitments toward paying fraudulent debts than paying workers’ pensions and gratuity.
It is generally acknowledged that the Nigerian foreign debts are highly fictitious and do not deserve to be paid, but that is not the case with pensions. Pensions and gratuity are funds that must be set-aside for that purpose.
However, over the years, these funds were mismanaged, crudely embezzled, or directly used to settle the fictitious debt. Numerous panels had been set up over the past years with numerous scandalous revelations.
For example, in the case of OAU Ife, a part of the pension funds were kept in finance houses, which went under along with workers’ funds. This is according to the university management, but nobody has been prosecuted to date. Over the years, the government had also cut back drastically on funding. Pensions and gratuity are the first casualties.
New pension bill – a Greek gift
When appending his signature to the so-called ‘new pension bill’ approved by the National Assembly, Obasanjo apologized to workers for the current state of affairs with the national pension scheme. According to him, the new pension scheme will solve the problems of pensioners. How, he did not substantiate.
To believe Obasanjo is more like the hen trusting the wolf to provide it effective security against the fox. Of course, the wolf would provide it effective security into its stomach. The fact that Obasanjo is a pensioner does not mean that the interests of pensioners are anywhere in his thoughts. The Greeks give better gifts but look at what happened to the Trojans when they took their gifts.
In addition, the ease with which the national assembly passed the bill is a warning to working people. The assembly is made up of the ruling elites who cannot be trusted to defend the interests of the masses. All they are interested in is furthering their own selfish interests.
Just like the privatisation campaign, the organs controlled by those responsible for the crisis facing humanity (the ruling elites) are painting the new pension bill as a lifesaver. They said the same about all the draconian mis-policies of the World Bank/IMF. The new pension bill does not say anything about how the owed pensions and gratuity would be paid.
Nothing but a wage cut and saving scheme
Unlike the former pension scheme where pensions and gratuity are funds set-aside for the purpose from the overall funds, the new pension scheme would be funded by a 7.5 percent cut in wages of workers and the other 7.5 percent contribution by the government/employer. For the armed forces, it would mean a 2.5 percent wage cut with the government providing the remaining 12.5 percent.
This 15 percent contributory scheme would now be deposited with private companies who are to manage the funds. A worker would be given part of the funds when he retires. Under the new scheme there is no more gratuity!
It must be noted that workers already pay between 10-15 percent of their wages as income tax, another 2.2 percent go to the dubious National Housing Fund, and there are other levies. With the addition of the pension deductions, it would mean that about a third of the wages of Nigerian workers would be deducted!
The new pension bill is a huge scam aimed at defrauding workers their right to a living pension wage and also aimed at making retrenchment easy – retrenchment-and-death made easy. The new pension scheme allows for a lot of abracadabra, “the more you look the less you get”.
Upon retirement, a worker would be given part of the fund to be determined by the pension managers and then paid on a monthly or a quarterly basis an amount to be determined again by the pension managers. Worse still is the fact that the withdrawal would be calculated based on an expected life span or annuity for life purchased from a life insurance company licensed by the National Insurance Commission.
The story gets worse; the payments are limited to the estimated average life span expected for a Nigerian, which is officially put at 53 years! Meanwhile the average retirement age is 60 years, or after thirty-five years of service. The pension managers and insurance companies would do the estimations. In essence, NO MORE PENSIONS UNTIL DEATH! Not to talk about a living pension wage.
Again the story gets worse; the scheme would take effect for workers retiring in the next three years, workers who would have saved just three years in the scheme.
The dream of the ruling elites of a world without pensions and gratuity is about to be realised in Nigeria, as this is a major World Bank/IMF programme. Once pensions are done away with, it would be retrenchment galore.
It is not just a tale of woes, at least for the big bosses who would manage the pensions, as they are in for super profits. The funds would be kept with pension managers who are to invest the funds; we all know what that means – gambling with workers’ lives. However, the Nigerian super rich bosses are used to blood money.
Already, big pension funds companies are being set up with a lot of underground fraud already taking place. Once these funds are placed in their pockets, it would mean more money to buy up government companies, gamble in the stock exchange, anything except advance production or the society.
It must be noted that it was the rich elite who embezzled and mismanaged the funds for the current pension scheme. They are also responsible for the fictitious foreign and local debt.
Unfortunately, the response of the leaders of the Nigerian trade union movement to this major attack on the lives of workers is nothing to write home about.
For one, there is a major news blackout to workers from union leadership. Worse still, union leaders in the past period when the bill was being debated gave unprincipled backing to the reactionary bill. This was similar to the position of the union leaders on privatisation until the realities of privatisation became clear to workers due to brutal experience.
The NLC president is the chairperson of the Nigerian Social Insurance Trust Fund, NSITF. This was the body that replaced the then National Provident Fund, NPF. This was the contributory pension scheme for workers in the private sector. Rather than fight for the harmonisation of the pension scheme of the private sector with that of the public workers, the NLC leadership settled for a figurehead leadership of the exploitative pension scheme for private sector workers.
On July 22, 2004, it was reported in the dailies that the trade union leaders of the NLC, TUC and CFTU are moving to challenge the new pension bill. Unfortunately, they are more concerned about fighting the bill by challenging the legality and lobbying members of the National Assembly.
The new pension bill is a BILL OF DEATH; it is a major attack on workers inspired by the IMF and must be fought against by workers. This struggle can be concretely organised by mobilising workers nationally by calling mass meetings and organising strike actions.
Living pensions possible
The arguments of the ruling elites that there is no money to fund anything have been exposed repeatedly. What it simply means is that there is no money to be spent on the working masses that create the profits they feed on, whether in the form of pensions or any other form of social service.
We can see what is happening to healthcare, education, roads, fuel, currency, etc. Their profits are top priority and they would do anything to loot the wealth of society. There can never be a solution so long as this system of capitalism exists. Living pensions are very workable, so long as the wealth created by the working masses is not expropriated by the minority.
[Published in the July-August 2004 edition of the Workers’ Alternative]