The director general of the Niger State Pension Board, Malam Usman Tinau Muhammad in this interview with ABU NMODU gives details of what the state government is doing to meet its pension obligations to retirees in the state and Governor Abubakar Sani Bello’s efforts in the area of prudent management of resources.
How far has it been with the ongoing payment of backlog of gratuities to retirees under the old pension scheme in the state by the government?
Well the state government just released the fourth batch of the old Pension scheme’s payment and gratuities. We feel pleased all the times when the government or this administration fulfills its promises and one of the promises like I always say is the fact that our senior citizens are being catered for as funds are made available. If you could recall I have given out figures as regards to first batch, second batch and the third batch; and now this present released funds is the fourth batch and the fourth has three or four categories of payment while the fifth one is the related to a seminar that we would hold very soon. All the discussions surrounding the contributory pension scheme would be discussed among the relevant pensions stake holders in the pension value chain in Niger State; they would be invited to participate in the seminar. And we are hopeful that PENCOM would also be part of it. But principally in this fourth batch we have residuals such as state retirees numbering about 50, we also have local governments retirees from 22 local governments of the state instead of the entire 25 local governments of the state. It is 22 local governments because these are the local governments that we find retirees that have not been paid because the payment is a continuous exercise where you find genuine and qualified retirees coming from different local governments. We took their files, we scrutinized it and we gave it to the audits both in the state and the local governments to look at the files of the individuals whether they are qualified or not. When it is scrutinized they would now bring them back to the board for payment. And that is why we have 22 local governments instead of the 25 local governments of the state. And there we have 200 retirees found to have been qualified for payment.
What other categories do you have this time around?
We have the permanent secretaries; again this time we now took it holistically. In other words we took the balance of them because initially we paid them six times but it was bringing a lot of noise among them. And we made a recommendation to the state governor, Alhaji Abubakar Sani Bello who in his magnanimity said we should call them and settle them. In that wise we have 26 people in that category which consists of one former head of service and 25 former permanent secretaries. We had nine people in the third batch and we had 12 people in the second batch. So if you now aggregate it those are the numbers of former permanent secretaries including one former head of service that have been settled. So, like I said, the total number of the retirees are 250 people both in the state civil service and local governments in this batch.
What is the cost implication in this fourth batch?
The cost implication for the state retirees is N29.6million, local government retirees from the 22 local governments, we have N267.2million and then for the payment of former head of service and the 25 retired permanent secretaries is N347.3million. The total sum is N644.1million. So, this is what was approved and released for payment for the fourth batch. And as usual we don’t want our retirees to suffer and come to Minna, the state capital, we did what we have been doing by decentralizing it. Those local governments that fall under Zone A, they are to meet in Bida, while those in Zone C, are to meet in Kontagora for their payments and those local government that are in Zone B, are to meet in Minna here, including payments to those retired 25 permanent secretaries are also to meet in Minna for their payments. We centralized it so that people would not suffer going up and down for payments of their pensions.
How much has the state government spent so far in the payment of retirees’ benefit under the old scheme?
When we came, there was a huge liability in the hand over note. At inception we saw a liability of over N2.66 billion from the local government pensioners that have not been paid over the years. At the state level, we have over N1.2 billion as liabilities making aboutN4.2 billion inherited under the old pension scheme but verifications reduced it to N2.06 billion which is being paid to retirees in batches now. We took serious steps to carefully verify these liabilities. At the end of the exercise there was variable in the balance of debt records. I don’t believe that balance of debt should be much higher than the other retirement benefits and death benefits. That balance of debt benefit that they collect is said to be a benefit of somebody who has died after retirement. That is if he has not spent up to five years before he dies. How many people can actually be found when you look at the number of retirees but they will say majority of them have qualified for balance of debt? So we struck that out and up to this moment nobody has come forward with balance of debt claims. We have therefore saved enormous amount of money that was being siphoned through that channel. The advantage we derived from this measure was that the liabilities were drastically reduced at the local and state levels. At the local government level, it was reduced to N1.226 billion while that of the state, it was reduced to about N830million. This amounted to the N2.06 billion that we presented to Governor Abubakar Sani Bello for approval. In most of my press statements I have mentioned that this was presented to the governor for him to have a clear picture of the liabilities which he magnanimously approved. I must clarify that all these were on the old pension scheme.
How did you raise the fund to offset these liabilities?
After my presentation to Governor Sani Bello and the approval, we have to look for the source to get the fund to pay the liabilities. There were three sources opened for us from where we could raise the funds for payment. One of them was recovered money from the blocking of leakages in pension matters. A committee was set up for the recovery of funds by the board to look at double payments on the retirement savings account under the Contributory Pension Scheme (CPS). In other words government was paying to the PFAs more than two to three times on some accounts. A consultant was employed by the board to recover such funds on 15 per cent agency fee agreement. Fortunately, that was part of the money we used and it was about N270million. The second tranche came from the N475million domiciled in CBN. It was originally N1.725 billion but already there was a mandate that took about N1billion out on the claims by the previous administration that it was used for the payment of gratuity. I do not agree with this because if such payment was made we could not have gotten this huge liability on ground. The third source was the money we have with the lead PFAs and I advised the governor that this tranche will be difficult to access immediately because PENCOM will come in and we do not have the time for long processes to be involved. So we made do with what we had from the two sources to commence payments of the liabilities in batches.
Do you have records of pension beneficiaries and payment schedule?
Yes payments were made in batches and records of beneficiaries are properly kept. The first batch included state and local government beneficiaries. Under the state pension, we captured 50 retired senior civil servants. In the case of the 25 local governments of the state we wanted to go away from what was happening in the past where nepotism was the order of the day. Now you don’t have to know anybody to access your pension benefit. We devised a method to consider those local government areas whose benefits do not exceed N70million and this was in the ratio of retired benefits N35million and death benefit N35million, and 14 local governments qualified. In the second batch we also took 50 from the state retirees and raised the amount involved in local governments from N70million to N150million and six local governments were paid. The same criteria applied under the third batch comprising of the remaining five local governments, and 50 state retirees. Another category came which included retired heads of service and retired permanent secretaries who were lucky because some of them retired since the administration of Governor Muazu Babaginda Aliyu and were not paid till we came to the rescue. The total cost needed for this group of retirees was N355million and they were 35 in number. We took four heads of service and eight permanent secretaries in the first batch while in the second batch nine permanent secretaries were paid and the remaining permanent secretaries got their benefit in subsequent batches. In all 388 retirees benefited at the state level while 940 beneficiaries got paid at the local government level. In summary, we paid over N610million for the state retirees, while local government retirees were paid N1.2billion.
Despite all these achievements, Niger State was recently listed as one of the states that owe pensioners in the country, what is your response to the report?
The report came to us as a surprise because from the inception of this administration to date, I know that there is no monthly pension that is owed by the state government. Few days ago, local governments paid their pension allowances up to June while the state retirees got paid before Sallah celebration. I am sure that July salaries have not been paid to workers at this moment of this interview. In fact, the governor made it categorically clear, particularly to Ministry of Finance, that pension charges or monthly payment should be in first line charge and this directive has been on. As for that publication, we had cause to respond to the highest level because it did not come only from the national dailies but also from the Labour Office in Geneva. There is a consultant called Budget IT that claimed to have conducted a survey of 912 respondents in Nigeria across the states and came up with that result. I disagreed and argued that they did not survey Niger State, which office did they go? I am in pension board but I have never seen any person that came to conduct survey interview. We have told them that we do not owe pensioners in the state.
Contributory Pension Scheme (CPS) is another delicate and controversial issue and opponents of the government use to give the government a poor rating, how are you tackling it?
As you are aware it was suspended in March 2015 before the inception of this administration. That suspension created huge liabilities because there were no deductions and government did not contribute which resulted in a gap. Therefore those that are retiring now do not know where they belong. However Governor Bello is very worried about this situation. He constituted a committee under the leadership of former head of service, Mohammed Made to look into the issue. The committee came out with a recommendation that the scheme is desirable because no worker would retire without getting his benefits. However, the committee also computed the financial implication. For the state to sustain it, it has to lift the suspension. There are three categories involved if government wants to implement the scheme. The first is the zero category which required government to set aside N184 billion. The second category is those that have served up to 15 years before the commencement of the scheme which means that they have 20 years before retirement. Government needed to set aside N86 billion for this category of retirees while the third category of 20 years and above was estimated at N46 billion. Government liked the third option but there was controversy because there was a private member Bill enacted by the state’s House of Assembly that did not have the input of government. The head of service committee decided to synergize with the lawmakers to fine tune the Bill and discuss its financial implication but it was passed on the day we were at the Assembly to meet with the lawmakers. The chairman Labour Committee of the assembly asked us to wait for them at the Assembly Gallery but while we were waiting the lawmakers passed the Bill. However, the Bill did not consider how to fund the implementation of the Bill. However despite this challenge the governor constituted implementation committee on the scheme where I served as secretary. We discovered that the private member Bill did not take care of the benefits of everybody. The gap created by the two years suspension of the scheme as I mentioned earlier, is now about N9billion. But to save the situation in the interest of workers, government has come out with a new contributory pension Bill in which it will pay 10.5 per cent while workers will pay 7.5 per cent.
All rights reserved. This material, and other digital content on this website, may not be reproduced, published, broadcast, rewritten or redistributed in whole or in part without prior express written permission from LEADERSHIP Nigeria Newspapers. Contact: email@example.com
- COVER STORIES16 hours ago
By-elections: APC Wins In Katsina, Kwara, PDP Takes Cross River
- NEWS24 hours ago
Kaduna PDP Guber Aspirant Defects To APC
- POLITICS16 hours ago
Why Southeast Rejected Buhari – Atiku Campaign Organisation
- COVER STORIES16 hours ago
Army Kills Terrorists’ Spokesman
- NEWS24 hours ago
2019: N/East Group Drums Support For President Buhari
- NEWS24 hours ago
Atiku To Kick-Start Campaign On Monday With ‘People’s Policy Launch’
- NEWS15 hours ago
Minimum Wage: Labour’s Stance Sacrosanct, Governors’ Rejection Diversionary – Wabba
- NEWS23 hours ago
First Female Abia Judge Laid To Rest