By Idang Alibi
If there is any legislation in the current dispensation whose implementation has had a most profound salutary impact on the average Nigerian and on the Nigerian economy, that law is, undoubtedly, the Pension Reform Act (PRA) of 2004 which created a new era in pension funds administration. It created the Pension Commission (PenCom) as a regulator and brought into existence Pensions Funds Custodians (PFCs) and Pension Funds Administrators (PFAs) to act as checks and balances so that the business can run well.
The main achievement of the PRA is that it effectively established pension funds administration as a business with a vast potential to contribute significantly to the growth and development of the national economy and offer succour to retirees. Apart from the military which for whatever reason was exempted from the new contributory scheme, the private sector has been actively driving it. The immediate gains are that it has spared public sector retirees who have joined in the new scheme the pains, anguish and absolute horrors some of their older colleagues used to face in getting their entitlements under the old arrangement. Under the new arrangement, a few days or weeks after retirement contributors easily have access to what is due them according to law. Since the new era, the sorry picture of gaunt, disheveled looking senior citizens with sunken eyes and forlorn looks staging impotent protests or parading the streets begging for sheer survival because they cannot have access to their benefits have completely disappeared. Retirees now claim what is due them without any hassles whatsoever.
The PenCom on its part has behaved well as a regulator concerned for the public good. The PFCs and PFAs, in pleasantly surprising unNigerian manner, have also behaved very well. After nearly ten years of the new pension era, the PFAs have astutely grown the assets of contributors to the scheme. Today, the assets are said to stand at about 4 trillion Naira. Blessed is any developing nation that has such a large, idle fund from which it can draw to plan its long term development. So far, no ugly things have been heard about the new pension arrangement. No one concerned has had cause to complain about anything awful. It is not wrong therefore to say that everyone involved is living happily after the enactment of PRA.
But dear fellow compatriots, the usual culprit, the ever looming bug bear known as the ‘’Nigerian Factor’’ is again about to ruin the new successful arrangement. This story of success, this story of peace, progress and tranquility in the formerly turbulent pension fund administration is about to be shattered by a profoundly disturbing recent order by PenCom to the PFAs. PenCom has ordered that all the Pension Funds Administrators should transfer the accounts and assets of all police personnel in their custody to the newly licensed Nigeria Police Force Pensions Limited (NPF PFA). The assets amount to 302 billions Naira. This order, I want to restate, has brought about a profound disquiet in the pension industry because it will shatter the peace and quiet that have so far existed in that sector of the economy.
It is not hard to see the many things that are wrong with this order. The directive is akin to a CBN governor coming out one morning without any rhyme or reason to decree that all commercial banks in the country should transfer the accounts and assets of all Federal Government employees to a newly established Federal Government bank known as Commercial Bank of Nigeria. It came just like that from the blues. No consideration whatsoever was given to the legal relationship that exists between banks and their customers. No regard for the free choice of customers to decide which banks to patronize. No regard for the law (PRA) which sought to effectively privatize pension funds management, an arrangement which is working just fine for retirees who are the targeted primary beneficiaries and other parties involved. The PenCom did not even think that anyone will bother to challenge it for unethical and possibly criminal and illegal conduct. How can an umpire so brazenly become a star player on the side of one of the teams? What has become of the doctrine of equity, fair play and justice?
But Nigeria is a country where things are done by the powerful with brazen impunity and with a straight face. The powerful who always seek to manipulate things to suit their desires believe that no one can challenge them. That is why I call on all men of goodwill who also believe in equity, fair play and good conscience to rise up and oppose this evil and illegal order from PenCom to PFAs because of the ruinous impact it will have on our economy.
This order will surely have a most catastrophic impact on the PFAs who are managing the assets of police personnel. It will destabilize the pension funds administration; have negative impact on the economy and it will be a throw -back to the bad old days. By licensing the police to manage the contributions of its personnel in the first place, the PenCom violated the spirit and letters of the Pension Reformed Act which was primarily designed to save workers from the trauma retirees used to suffer under the old arrangement when the public sector was also managing the funds of its employees.
Having made the mistake of licensing the police to manage its personnel’s funds, why not ask them to start enrolling its men and women who wish to enroll with them instead of seeking to destabilize existing PFAs by asking them to surrender what they have secured by dint of hard work and expert marketing to the new player? The new move will severely harm some of the existing PFAs who are managing assets of police personnel. What is the rationale in seeking to empower a new untried and untested entrant to a market with a whopping portfolio of over 302 billion Naira? Would not the weight of such unearned glory sink them especially as the regulator PenCom will not have the courage to monitor their activities in order to safeguard the interest of ordinary policemen and women who will be compulsorily enrolled with them?
What is the guarantee that the newly licensed police PFA will be a better manager of the contributions of police personnel than the existing PFAs? Have the opinion of ordinary police men and women being sought as to their preference as to who should manage their contributions as demanded by the Pension Reform Act? One of the greatest financial scandals to have rocked this nation in the past few years involves the stealing of police pension funds running into billions of Naira. The Police therefore have no history of competence or integrity to run a pension fund for anybody.
The mistake has already been made in licensing the police to participate in pension funds management. We should not compound it by giving them unfair, illegal and unmerited advantage that will spell doom for the pension industry. Dr. Okonjo Iweala who fully understands this matter should intervene and counter PenCom’s ill-advised and ruinous directive for the good of Nigeria and those of its retirees.
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