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ABUJA, FCT, NIGERIA – Retirees under the Contributory Pension Scheme (CPS) in Nigeria have described the scheme as an instrument of economic annihilation, forcing workers into abject poverty after retirement.
Under the guise of managing their benefits and entitlements, retirees claimed that they are suffering immensely.
Implemented in 2004, the CPS requires retirees to choose between an annuity operated by insurance companies or programmed withdrawals managed by Pension Fund Administrators (PFAs) under the control of the National Pension Commission (PENCOM). The 2014 amended Act did nothing to alleviate retirees’ plight under CPS.
The retirees reiterated that “CPS is particularly onerous in its denial of retirees a substantial lump sum after retirement, instead dispensing paltry monthly pensions. Consider the ordeal of a retiree who served the Federal Government of Nigeria from July 15, 1981, to July 15, 2016. After 35 years of service and reaching the maximum age of 60, this individual had a total credit balance of ₦6,745,823.34. Of this, only 25% – amounting to ₦1,686,455.84 – was paid out, while the remaining 75% was retained by the PFA for investments that yield high returns, profits which are not reflected in the retiree’s meager monthly payments.
“Since 2016, this retiree has received a mere ₦26,703.15 per month, despite the substantial profits declared annually under CPS. This amount is barely enough to buy a loaf of bread each day for a month, given the current prices.”
According to the retirees, “this travesty extends to all retirees under this scheme, a bitter disappointment for a nation that prides itself as the “Giant of Africa” and claims in its National Anthem that “the labor of our heroes past shall not be in vain.”
Retirees worked their whole lives for their benefits, only to have those benefits managed and diminished by PFAs.
“Is 35 years of service not enough to trust retirees with their own entitlements? Is a 60-year-old retiree incapable of managing their own investments? The current system suggests so, as it allows PFAs to handle investments and return only a fraction of the profits to retirees.
“This exploitative practice must end and be condemned by all Nigerians and those in positions of power. Today’s workers could be tomorrow’s retirees under this same unjust system.”
The association called for action, saying, “The N6,745,823.34, if given in full, could yield a yearly income of ₦674,582.33 at 10% interest, translating to ₦56,215.19 monthly. This is far better than the ₦26,703.15 received under the CPS for the past seven years without any increase.
“Meanwhile, the cost of living continues to rise, leaving CPS retirees in dire straits while those under the Defined Benefit Scheme see their pensions increase.
“The recent removal of fuel subsidies has exacerbated the hardships faced by retirees, rendering their paltry monthly pensions even more inadequate.
“At the current exchange rate, the monthly pension of ₦26,703.15 equates to just $35.60, a far cry from the globally recommended $1000 to lift individuals out of poverty.”
The group said this is a clarion call to workers still in active service to join the crusade against the servitude imposed by the CPS. “It is a call to duty for all right-thinking Nigerians, unions, the National Assembly, the Presidency, and other relevant bodies to rise and defend retirees.
“The goal is to secure a living pension that sustains life, free from the greed and exploitation perpetuated by PENCOM and PFAs under the current CPS arrangements.
“The retirees said, “Enough is enough. The current system under CPS must end. Retirees deserve better than economic enslavement.
“It’s time to protect the rights and benefits of those who have spent their lives serving the nation.
“Join the fight against this modern-day slavery and ensure a fair and just system for all Nigerian retirees.”
*This call comes from the Contributory Pension Retirees Forum and senior citizens-to-be, directed to:
- The President of Nigeria
- The National Assembly
- The Head of Service
- All relevant workers’ unions
- The Minister of Labour
- All Federal civil servants
