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Headline News Special Report

Tackling gray areas in Pension Administration

Pension is one of the most deliberated issue among the working class in recent times as it affects almost all spheres of their lives directly or indirectly. Perhaps, this prompted the then administration of Chief Olusegun Obasanjo to take a bold step for the reform of the pension act that gave birth to the new Contributory Scheme.

This allows an employee to contribute to his or her pension savings account.

The pension reform act of 2004 as amended in Twenty fourteen, was aimed at correcting anomalies such as embezzlement and delay in the payment of benefits that characterized the old scheme.

Unfortunately, all problems associated with the old pension scheme is gradually tracing its way back with cases of late remittances of accrued pension funds to Pension Administrators by employers taking Center stage.

This sad development has continued to elicit reactions particularly among concerned citizens.

LATE REMITTANCE OF PENSION

Unarguably, late remittances of accrued rights by employers have often made the retiring workers skeptical of the difference between the Contributory Pension Scheme and the old system.

There is no slight shift from the old and the new pension scheme except that the earlier system was defined and the new one is totally based on investment as well as accumulations before retirement.

Lack of proper record keeping, incident of ghost workers, low quality manpower, Non- Actual valuation of the scheme, inadequate pension benefits as well as non indexation of pension benefits, are issues militating against pension administration in Nigeria.  

It is worthy to note that in spite of all the challenges, the new pension system has made remarkable progress and in the last few years however, there is the need for more to be done to strengthen the whole process.

It is therefore imperative for government to take proactive measures that would ensure best practices in the nation’s pension administration.

Eliminating bottlenecks in Pension administration

To this end, government must ensure elimination of administrative bottlenecks hindering successful implementation of pension policies. 

Proper record management and adequate skilled manpower are key to address all lapses.

There is also the need for review of certain clauses in the new pension scheme to accommodate some issues of concern to workers to give workers glorious retirement devoid of frustration.

Moreover, an employee should be able to access non interest building loan from individual pension Administrators without stress as well as allowing retirees to withdraw their total lump sum upon retirement without paying tax.

Provision of Affordable Healthcare

In addition, federal government should look inwards to create an avenue for the retirees to access quality and affordable healthcare services within pension system as part of corporate social responsibilities of the Pension Administrators.

Prompt release of retirement benefits to beneficiaries upon exit is also paramount, this will go a long way to curb corruption among government officials.

Retirement should be a period of rest, therefore government and stakeholders should make deliberate efforts towards making life stress free for Nigerians as they bow out of service.

Reporting by Habiba Kudu; editing by Adeniyi Bakare