President of the Nigerian Labour Congress (NLC) Comrade Joe Ajaero has called for a return to the old pension scheme regime.
Ajaero said the current regime falls short of the fundamental purpose it was set up to address.
He spoke at the 2024 National pre-retirement summit with the theme “challenges, strategies, prospects and opportunities at retirement in Nigeria.
The programme was organised by XEM, a global opportunity and capacity development hub in Africa.
Ajaero stressed that retirement ought not to be a death sentence but something every worker should be looking forward to.
He said the Federal Government is alleged to owe nearly N260 billion in pension arrears, with federal parastatals accounting for an additional N40 billion.
He said many workers have fear about what would become of them after retirement because it does not offer security.
He said: “I stand before you today with a deep sense of duty and commitment not only to our hardworking Nigerian workers, but to those who have retired and have dedicated their lives to building our nation.
“As we gather at this important summit, it is crucial that we shine a light on the pressing issues faced by workers as they approach retirement and as they eventually retire from active service. The theme of this summit, “Challenges, Strategies, Prospects and Opportunities at Retirement in Nigeria,” resonates deeply with our collective experience; concerns and aspirations.
“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.
“Pensions are meant to offer security and peace of mind, ensuring that retirees can enjoy their golden years without financial stress and in good health.
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“However, the reality for many of us is starkly different. It is worrying that most retired members encounter not just health challenges but many others leading to untimely deaths because of the character and nature of our Pension scheme which pauperises them financially at retirement.
“Retirement under the present scheme may therefore become a death sentence for many and this has many consequences for behaviour of workers in active service.
“The federal government it is alleged owes nearly N260 billion in pension arrears, 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).
“The Micro-Pensions designed for the informal sector remain inadequately activated, further complicating the financial security of our informal economy workers.
“The non-contributory Pensions funds are still subject to severe lootings by those who are supposed to manage them without consequences.
“ We had wished that the various statutory agencies saddled with the responsibility of protecting workers are alive to their responsibilities.
“These challenges create an atmosphere of fear and uncertainty for the average worker approaching retirement in Nigeria.”
He said many questions fill the minds of workers as they retire such as whether the pension will be paid immediately, how to survive, real value of the pension, will it be sufficient to cover basic needs and many more.
He added: “These are fears that our pension system should address, yet, unfortunately, it often exacerbates them. Retirement, which should be a period of joy and rest, is too often perceived as a daunting prospect as a result of some of these.
“Nigerian Workers before and at Retirement are confronted with life changing challenges which include; Inadequate Pension Benefits Many retirees face insufficient pension payments that fail to meet basic living expenses, Inflation and rising living costs erode the value of fixed pension incomes over time.
“For example, those who had saved up to N10 million in their Retirement Savings Account (RSA) before 2023 have seen this value drop to around N3 million in real terms – a situation that is unacceptable. Pension schemes often lack proper indexation to adjust for cost of living increases due to inflation.
“Delayed Pension Payments; Inconsistent Policy Implementation and paucity of Support for Informal economy still persist thus necessitating the need for inclusive policies that integrate informal workers into the pension system,” he stated.
He also called for commitment towards addressing issues plaguing retirees, saying “Our workers deserve a retirement that reflects the years of service they have dedicated to our nation. Together, we can create a system that ensures dignity, security, and joy for all Nigerian retirees.
“We must make workers look forward to retirement with great expectations and not with great trepidation and this is only achievable if we all agree that a worker’s retirement would be a period of rest and a new life that is better than the ones he spent while in active service. Let it be a time to die but a time to live.”
The Head of Civil Service of the Federation, Dr. Folashade Yemi-Esan said that the service was working hard to improve the welfare of workers.
Esan said the service was committed to create opportunities for workers.
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