The point cannot be overstated. The main objective of the Pension Reform Act of both 2004 and 2014 is to ensure administration and payment of pensions for workers in both the public and private sectors of the economy after their retirement.
So, pension fund, statutorily is meant for payments of workers’ pensions not building of roads or railway lines.
Pension fund as so called is fund for prompt payment of retirees. It is saved workers’ capital that should be promptly paid back to them after meritorious years of work.
I read the Vice President Yemi Osinbajo said at the World Economic Forum in Davos, Switzerland, that the Federal Government was working on how to tap into the huge pension fund to finance infrastructure in the country.
For one, the fund is not all that huge given the huge pension liabilities in the country. I think we must grow the pension assets more.
And Federal Government should lead by example. In recent times, the Federal Government is defaulting in paying to the pension fund administrators some of the contributions of their employees.
The coverage of the pension has room for more employees at the states, local government, as well as private sector levels. I am also aware that 2014 amendment of the Pension Act provides investment of pension fund in some financial instruments.
But that can only be done with due consultation with all the stakeholders, mainly the pensioners. Pension fund is certainly not a substitute for budgetary allocations for roads and electricity.
Chief Olorunfunmi Basorun (A former Deputy Director, Central Bank of Nigeria)
Pension fund is usually invested in treasury bills or high yielding fixed deposits. So, if they are there and idle, the Federal Government can loan from it and use it to execute projects rather than the money being idle.
I recall that when Babatunde Fashola took over at the ministry, he gave a lecture and spoke extensively on funds which are idle. He said instead of the funds being idle, they could be used in executing developmental projects.
I think it is a good step. The idea needs to be well programmed such that the fund will be available when needed.
There are thousands of people who are due for retirement in 10 years’ time and are already making pension contributions. So, such funds could be used instead of the money being idle.
Samson Alabi (A former Public Relations Officer, Senior Staff Association of Nigerian Universities)
Actually, there is nothing wrong in the Federal Government using pension fund, especially when it seems that the $30bn foreign loan is not forthcoming. However, we know that this is Nigeria and we don’t keep our promises. What happens to the contributors of the fund if the Federal Government cannot pay back the money at the stipulated time?
The problem it will cause to the masses will be massive, and it is better imagined. I won’t be categorical in my answer because it will spell doom for workers if the government can’t pay back. That is the only problem there. But if there is an assurance that they will pay back the money, there is nothing wrong in allowing them to borrow the money.
At least, the interest which will be paid, will remain within our economy. But honestly I will not want to gamble with the lives of those whose hope after retirement is solely on the pension remittances.
It is common for the Federal Government to renegotiate its debt whenever they cannot pay. So, will this not jeopardise the good intention of the pension scheme if they are unable to pay back at the agreed date? These are the issues I want to be thoroughly examined before the money is given out to the government.
To avoid mass suicide in case the Federal Government is unable to pay back, I think they should look elsewhere for the fund to finance their projects.
Bobboi Kaigama (National President, Trade Union Congress)
Why are they having access to the fund? What do they want with the fund? You cannot just give access to the fund without letting people know what you want. In fact, one thing is that the government still owes its own part of the contributions to PENCOM. For over one year, they have not contributed. So, why are they having the access?
“Is what they will use the money for meant for the benefit of the contributors? If not, they should forget it because they have not contributed their own part of the contribution to the funds.
For the last one year, they have not contributed anything.
The money should not be tampered with or handled in a way that it can tamper with the retirement of the contributors. PENCOM has its own board. Why are they bothered? If there is a need for the use of PENCOM fund, the PENCOM board should decide; it is not for the government to decide.
The representatives of the Nigerian workers are there, they are the ones to decide the use of the funds for any project, let them bring it to the board of PENCOM.
The funds should not be endangered at all. Rather, the government should fulfill its own part of the contribution because workers, who have retired over a year ago, cannot access that fund as the Federal Government contributions have not been remitted to PENCOM for the last one year.
Esther Boro, (Yenagoa-based Public Affairs Analyst)
The Federal Government should not have access to pension fund. Why should they have access to it? The pension fund is independent fund irrespective of where you used to work. That is the gratuity and the pension the pensioners have after serving their different organisations or establishments.
You must have worked with the federal, state or local government or any other organisations; but your pension is put into a fund and an independent body manages it. It is curious for the Federal Government to have access to the fund. The Federal Government can only intervene with laws to protect the consumers, in this case, the pensioners. So, I do not see the rationale for the government to access the fund whatsoever.
We are talking of fund meant for people who have worked for the government or private organisations. Many states in the country, for instance, have not been meeting their pension obligations to the retirees. So, allowing the government to have access to pension funds will be a big mistake that will not do the pensioners and intending pensioners any good.
So, the question that readily comes to mind is, why does the FG need access to pension fund? Do they want access to borrow money from the fund?
It will certainly be a bad development for the government to have access to it and if they should be allowed, the pensioners will suffer in the long run. We need to know why the government wants access to the fund.
My take on this is that in Nigeria, it will be dangerous for the FG to access the pension fund. It is dangerous because a large number of pensioners at present have not been taken care of. Most of them are languishing – their pensions and gratuities are not paid to them as and when due. You can imagine what will become of the funds when government begins to have access to it. Even those in private companies, who have keyed into the scheme, will suffer as there will not be guarantee that when they retire, their pensions will be paid to them.
Rev. David Ugolor, (Executive Director, African Network for Environment and Economic Justice)
All over the world, pension fund is used for development. But I believe the pensioners should have the right to decide access. Pension fund could become a useful source to fund long-term development because it is cheap, compared to other commercial loans and suchlike.
If the government can judiciously use it for long-term development and there is an enabling environment for the private sector to thrive, it will really help even the pensioners to survive.
But the entire system has collapsed; that is the challenge. The infrastructure for the private sector to survive is not there. The government is not using the funds judiciously. There is a high level of corruption.
So, the people are sceptical about the government. Unfortunately, the government has not been able to play its own part to make sure that those who have served it for 35 years get their pension at the end of the day.
Well, I think the private sector should manage it (fund) because it will have an obligation to mange it very well.
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