National Record

Social security means measures, processes and systems aimed at providing, maintaining and ensuring a humane and dignified standard of living not only for those working but for general citizenry who for one reason or the other are incapacitated and unable to earn a living.

In consideration of a better old age for workers, the Act established a CPS as a panacea to old age poverty and destitution, especially for those who had been on paid employment in their active age. The CPS guarantees pension, which is an amount of money paid regularly and periodically to a member of the scheme who is no longer capable of working as a result of either ill-health or old age.

I know retirees who have been on retirement for 8 to 9 years. The balance in their RSAs today is slightly higher than it was after they collected the initial lump sum. What that means is that for 8 and 9 years, the pensions they have been collecting have been coming from the return on investment. It is therefore not possible for the pension of these retirees to terminate after fifteen years when there is fund in the RSA to continue to pay monthly pension. Since the commencement of the CPS in 2004, retirees under programmed withdrawal have had their monthly pension enhanced twice. The quantum is a discussion for another day.

The CPS is mandatory for all employees in the public service. However, certain public officers are exempted from it. These officers are judges of the Supreme Court and Court of Appeal. These judicial officers are through the provisions of Section 291 of the the 1999 (as amended) entitled to pension for life at a rate equivalent to their last annual salary and their allowances in addition to any other retirement benefits to which they may be entitled. Others exempted include members of the armed forces, the intelligence and secrete services of the federation; any employee who is entitled to retirement benefits under any pension scheme existing before the 25th day of June 2004 but as at that date had 3 or less years to retire.

Prior to the coming into force of the Pension Reform Act 2004, pension schemes in Nigeria were categorised into public and private sectors. The public sector had the Pay As You Go (PAYG) Defined Benefits Scheme, which was bedevilled with many problems. Against the backdrop of an estimated N2 trillion deficit, budgeted appropriations for pension benefits had over the years fallen far short of promised benefits. This was further compounded by late release and sometimes, non-release of funds. Pension arrears owed to military, police, customs, immigration and prisons including civilian pension departments alone were estimated at N56 billion as at the end of June 2004. The pension crisis in the more than 300 federal government parastatals was alarming as most of these schemes remained under-funded.