The larger implication of the current financial haemorrhage at PenCom is not only a reversal of the modest gains in the period after the pension reforms of 2004, but may likely compel a relapse of the plight of pensioners to their impoverished conditions before the reforms.
As Nigerian workers joined the rest of the world in commemorating workers day, yesterday May 1, their condition remained unstable due to the inadequacy of the national minimum wage, while their future in retirement is threatened by the uncertainty arising from what appears to be a big heist at the National Pension Commission (PenCom). Confronted with the monstrosity of corruption in the old pension fund management, the Defined Benefit Scheme (DBS), the Olusegun Obasanjo administration carried out a fundamental overhaul of the system, to meet up with its core responsibilities to Nigeria’s retirees. This effort became institutionalised in the Pension Reform Act of 2004, which introduced the innovation of the Contributory Pension Scheme (CPS) and the establishment of the National Pension Commission (PenCom) as the pension fund manager through pension fund custodians (PFCs) and pension fund administrators (PFAs). To consolidate on the success of reforms in pension fund management, the Goodluck Jonathan administration deepened reforms in the sector, culminating in the Pension Reform (Amendment) Act 2014, which created the Pension Transition Arrangement Directorate (PTAD) to address pension issues relating to retirees under the old scheme and properly define the tenure of its management, as well as that of the board of PenCom.
Between 2004 and 2014, pension reform had become relatively successful, with accrued funds in excess of US$27 billion and without any reported case of mismanagement. However, this may no longer be the case as the entrenched corruption, with deepened roots, now pervading the entire system, appears to have spread widely into the affairs of management at PenCom. In what has become the subject of a National Assembly inquest, PenCom appears to be oozing a stench of corruption, if allegations of impunity, mismanagement, graft, misappropriation and outright pilfering of pension funds, currently being investigated by a House of Representative adhoc committee, becomes proven. From allegations of the award of fraudulent contracts to the illegality of the unilateral increase in the terminal benefits of its top management staff by 300 per cent, with an expansion in the number of general managers from 10 to 17 and the issue of a missing N33 billion, these are clear indications of a reversal of the gains of pension fund management to the situation of the pre-2004 era.
In addition to impunity and disregard for the due process of the rule of law in the conduct of government business, a selective war on corruption, which appears to protect friends but persecutes perceived enemies, has only succeeded in perpetuating the vicious cycle of endemic corruption in Nigeria, resulting in the great heist purportedly going on at PenCom. In providing a proper setting for the current orgy of corruption in PenCom was the Muhammadu Buhari administration’s – in its now well-known notoriety of almost always undermining the due process of rule of law – sacking of the former director general of PenCom, Chinelo Anohu-Amazu, along with the entire management and board in a manner that contravened the PRA Amended act of 2014, as their tenures of office had not expired then in April 2017. Whereas, section 21[a]-[g] clearly spells out how an erring member of the executive management committee of PenCom can be removed from office, the sack of the Anohu-Amazu-led management didn’t follow the laid down procedure. Apart from the flagrant disregard of the rule of law in this instance, a grave injustice was also done the South East geo-political zone, where Anozu-Amazu hails from, when the president Appointed Aisha Dahir-Umar from the North East as Anohu-Amazu’s replacement as acting DG, in direct contravention of section 21 of the PRA 2014, which states that, “In the event of a vacancy, the President shall appoint a replacement from the geo-political zone of the immediate past member to complete the remaining tenure.”
It has been a hide-and-seek game between the House of Representatives adhoc committee and the management of PenCom, over the investigation of allegations of corrupt practices, including the issue of the missing N33 billion from the coffers of the Commission.
The free-for-all reign of corruption and maladministration now plaguing PenCom is further enabled by the failure of the Buhari administration to appoint suitable persons into the four vacant positions of commissioners in charge of the administrative, technical, inspectorate, as well as finance and investment sections, in line with section 31 of PRA 2014. Similarly, the governing board of PenCom remains vacant as the president has failed to appoint suitable persons representing relevant stakeholders in line with section 31 of the PRA 2014.
It has been a hide-and-seek game between the House of Representatives adhoc committee and the management of PenCom, over the investigation of allegations of corrupt practices, including the issue of the missing N33 billion from the coffers of the Commission. In response to a series of communication between the House adhoc committee and the Dahir-Umar led PenCom, seeking relevant answers to the enquiry of the leguslature on the many allegations of maladministration, the nation’s apex pension fund managers are said to have deployed cover ups, clever lies and half-truths to deflect from the substance of the matter under probe. When it appears not feigning ignorance of the content of the communication of enquiry, PenCom claims its personnel with the relevant information are all on leave. And when the acting DG of PenCom, Dahir-Umar appeared before the committee, she stated under oath that her organisation maintains only one account with the Central Bank of Nigeria (CBN), a claim that was contradicted through communication [marked BKS/CSO/GEN/NASS/02/094] from the CBN to the committee, indicating that PenCom maintains eight accounts with it.
So far, PenCom has failed to provide documentary evidence about the purpose of the withdrawal of this humongous amount of pensioner’s money and the beneficiaries. Curiously, CBN has also withheld the operational number of the account from which the controversial N33 billion was withdrawn from, which indicates possible complicity in high places.
Several months into the parliamentary inquest into its activities, PenCom has not been able to provide satisfactory answers to the enquiry about the missing N33 billion pension funds. So far, PenCom has failed to provide documentary evidence about the purpose of the withdrawal of this humongous amount of pensioner’s money and the beneficiaries. Curiously, CBN has also withheld the operational number of the account from which the controversial N33 billion was withdrawn from, which indicates possible complicity in high places.
The larger implication of the current financial haemorrhage at PenCom is not only a reversal of the modest gains in the period after the pension reforms of 2004, but may likely compel a relapse of the plight of pensioners to their impoverished conditions before the reforms. While the Buhari administration prides itself on making gains in the war against corruption on the simplistic basis of the number of arrests and prosecutions of members of previous administrations carried out, a reality check reveals the current occupiers of public offices are similarly helping themselves with public funds, thereby perpetuating the monstrous cycle of graft and leaving Nigerians as the ultimate looser at all times. The failure of the Buhari administration to act with the required swiftness when there are allegations of corrupt practices, leading to economic and financial crimes by agents of the government, has helped to emboldened them in their bad behaviour. The most sustainable anti-dote to corruption is the total compliance of the business of government to the dictates of the morality of due process and the rule of law.