Interconnecting structures to foreclose the ravages of Nigeria’s pension fraud

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The system of pension in Nigerian like many other subjects is coloured with administrative deficiencies. The discourse over the subject is such that carries emotional reservations, when critical concerns are put to bear on the plight of aged workers deprived of their entitlements. It is known that the clogging of bottlenecks borne by administrative deficiencies have made the difficulties of accessibility to pension and gratuity of retired civil servants a hoarse. The hoaxing of pensioners by crafts of corruption have left many on the bed of languishing after years of service.

Recently, the rounds of fraud and mismanagement of pension fund, borne by inclinations of corruption, have been on the frontal subjects of discourse in the administration of the subject. It is saddening the rots of the cultural mischief of corruption have become so endemic – not sparing the system of pension. It would only evoke emotions  how administrators have become so despicable, villainous and inconsiderate to such extent of feasting on entitlements of pensioners who all their productive lives have served. But it appears the disposition to the psyche of corruption, has become so pronounced in the world of the perpetrators that it has swallowed their conscience.

Over the years, the issues of high profile corruption of laundering of pension funds have been making rounds. Bringing the culprits to justice has strongly been clouded with bottlenecks, as the elongated character of trials in the Country has continued to leave  numbers of cases inconclusive. Earlier this month, (Tuesday, October 5) the Economic and Financial Crimes Commission (EFCC) said that it had recently probed pension frauds to the tune of no less than N157billion. The Director of Operations, EFCC, Adulkarim Chukkol who made the disclosure at a two-day sensitisation programme on the theme: “Eradication of Pension Fraud in Nigeria,” said   many more of the cases will be unraveled as the Commission is ever ready to bring those who embezzle pension funds to justice. However, it is pathetic that such suits have neither translated into the recuperation of the funds, nor have many of the legal suits brought the suspects to book as many of the cases remained shrouded with the bottlenecks of the processes of the Country’s judicial system, frustrating speedy trials to bring the cases to conclusive end.

A locus classicus among such fraudulent cases was the suit instituted in 2013 by the EFCC over an alleged N20bilion on the Police Pension Scheme. It would be recalled that the EFCC had last year re-arraigned six persons accused of the N20 billion fraud in the Police Pension Scheme. In the petition, the EFCC had alleged that some serving police officers attached to the Police Pension Office reportedly connived to defraud both the government and others of the sum.

Another locus classicus is the ongoing case of the Former Chairman of Nigeria Pension Reform Taskforce Team, (PRTFT), Abdulrasheed Maina, who has been accused of diverting about N100 billion from pension funds. Maina, who was earlier granted bail, reportedly absconded upon the bail and was declared wanted until he was discovered in Niger and repatriated back to the Country to continue his trials on the fraud.

The consideration of the chagrin of elder citizens who have spent their productive years serving the Country only to end up stranded  by a system which is supposed be responsive to their entitlements, sparks much contention. The emotional and psychological trauma which many are reduced to, over frustrations from getting their entitlements without glitches, have led to the colossal losses to untimely illness and departure of many elder citizens not quite long after their retirement. The feeling of distrust, betrayal, frustration, abandonment, cheating, and the chagrin of neglect, among others which cluster to destabilise their human framework of thoughts, constitute threats to senses of living. The impacts have over the years constituted a strong base of loss of motivation for workers, particularly civil servants in the Country. The argument has been why should they be committed to a system that doesn’t guarantee their security in old age after serving for years?

As the narratives of corrupt tendencies keep taking toll, the need for a clampdown on the mischievous perpetrators to serve as deterrent to other potential administrators of mischief is paramount. Appreciating the need for a heavy clampdown to bring perpetrators to book,  the National Pension Commission (PenCom) had recently declared its resolve to partner the EFCC, to ensure safety of pension funds and forestall incidences of fraud in the sector. Director-General of PenCom, Hajiya Aisha Dahiru-Umar, had  in a goodwill message, at a sensitisation programme on Eradication of Pension Fraud in Nigeria, said: “PenCom is, indeed, pleased to partner with the EFCC in this awareness creation initiative, which essentially seeks to examine the incidences of fraud in the pension sector in Nigeria and ways of eradicating the menace in a proactive manner. This event will, no doubt, create the synergy needed to boost the efforts of the two organisations in the discharge of their respective statutory mandates.

“As you may recall, the problems of fraud and mismanagement in the pension sector in Nigeria were amongst the reasons that necessitated the pension reform of 2004 by the Federal Government. The Pension Reform Act 2004, which was later reviewed and re-enacted in 2014, introduced legal and institutional frameworks aimed at addressing the rot that characterised the administration of pensions in the pre-reform era. The Act also established PenCom to regulate and supervise all pension matters in Nigeria, including the licensing of Pension Fund Administrators, PFAs, and Pension Fund Custodians, PFCs.

“The Pension Transitional Arrangements Directorate, PTAD, was also established by the PRA 2014 to administer, in a transparent manner, the Defined Benefits Scheme, DBS, for pensioners exempted from the Contributory Pension Scheme CPS. These measures substantially restored credibility and confidence in Nigeria’s pension systems. Thus, we have, today, an industry that has accumulated pension assets in excess of N13 trillion, invested in various aspects of the economy and still growing. Pursuant to its statutory mandate under Section 23(f) of the PRA 2014, PenCom has consistently undertaken public education, enlightenment and awareness campaigns on the CPS and other pension matters. It has also developed and established structures, systems and procedures that ensure transparency, accountability and efficiency in the administration of pension in Nigeria. These systems and procedures have become reference points for other African countries, many of whom have undertaken study visits to the Commission.

“However, as it is the case with every human endeavor, retrogressive elements continued to exploit procedural gaps in the operations of pension practitioners in both the CPS and DBS to the detriment of unsuspecting public. Thus, new issues and challenges continue to emerge, which place special responsibility on the regulators, the operators and other stakeholders to constantly review their operating environment with a view to finding solutions to address the problems.

“Happily, the PRA 2014 had strengthened Nigeria’s pension institutions in both the Contributory and Defined Benefits Schemes, and imbued them with the capacity to rise above emerging challenges. The continued collaboration with the EFCC would certainly serve as catalyst for reducing the menace of fraud in the pension industry to the barest minimum.”

It is important that such collaboration on the basis of a workshop be sustained as a continuum to develop structural responses towards the end of a virile system that proactively forecloses all gaps to shrink to the bearest minimum, the possibilities of fraud and mismanagement in the administration of pension.  It is thus, important that the engagement be taken with broader coverage to incorporate interconnecting links with other relevant bodies to raise functional parameters for a responsive architecture foreclosing the incidents of fraud and misappropriation in the administration of pension in the Country.