By Afolabi Samuel Odunayo
The Nigeria Labour Congress (NLC) has condemned the current pension scheme, stating that it fails to provide adequate value for retired workers.
This criticism is coming amid allegations of over N360 billion in pension arrears owed by the federal government.
At a retirement summit in Abuja with the theme: “Challenges, Strategies, Prospects and Opportunities at Retirement in Nigeria,” the NLC President Joe Ajaero highlighted the severe shortcomings of the current pension system.
He argued that the Naira’s instability undermines the scheme’s ability to serve as a reliable store of value, thus failing retirees.
Ajaero said:”The pension scheme, as it currently stands in Nigeria, unfortunately falls short of its fundamental purpose; to provide for workers in their old age.
“The medium for storing pensions, which is the Naira, has maintained an unstable value and has kept depreciating over the years. It is only a stable platform that can truly serve as a solid store of value that can sufficiently maintain the value of contributions when workers retire.”
While emphasizing the adverse effects of the current pension scheme on retirees, he noted that many face financial hardship and health challenges, leading to untimely deaths.
Speaking on the alleged pension arrears, he mentioned that the federal government reportedly owes nearly N260 billion, with federal parastatals accounting for an additional N40 billion.
“Some states have arrears stretching up to eight years. In the private sector, reports indicate that many companies are in arrears of up to three years, deducting contributions from workers’ salaries without remitting them to the respective Pension Fund Administrators (PFAs),” he said.
According to him, the National Pension Commission (PENCOM) recovered N984.23 million from 36 defaulting employers, comprising N406.42 million in principal contributions and N577.87 million in penalties in 2021.
However, Ajaero pointed out that the Micro-Pensions scheme for the informal sector remained inadequately activated, leaving many informal economy workers financially insecure.
The NLC president also lamented the mismanagement and looting of non-contributory pension funds, citing the cases of Maina and the former Accountant General, respectively.
He criticized what he called the lack of accountability and the failure of statutory agencies to protect workers’ interests, thereby creating an atmosphere of fear and uncertainty for those approaching retirement in Nigeria.
“The non-contributory pension funds are still subject to severe lootings by those who are supposed to manage them without consequences,” Ajaero said, “As usual, people get away with all manners of mind-boggling heist in our nation. We had wished that the various statutory agencies saddled with the responsibility of protecting workers are alive to their responsibilities.”
