Pension Administrators Or Human Exploiters?

It is an undisputed fact that the management of pensioner’s investment in Nigeria is as old as Nigeria itself. This idea which was designed to cater for the welfare of the pensionable retired workers has rather subjected pensioners to unbearable agonies such that most of them have become beggars, always looking up to the government for a more positive managerial approach.
All the same, the pension fund was introduced by the colonial masters to provide income and security for old age-British citizens working in Nigeria upon retirement as post-retirement benefit.
The first Nigerian legislative instrument on pension matters was the Pension Ordinance of 1951. This however, had retrospective effect from 1st January, 1946.
Numerous other reforms have taken place such as the National Products Forum Scheme (NPFS-1961), Pension Fund Act 103 (1979), Police and Government Pension Act 75 (1987), Insurance Trust Fund (NSITF – 1993) and the Pension Reform Act 2004.
The idea of management of pension fund in Nigeria was designed to cater for the welfare of the pensionable retired workers. This had for long gained global recognition and acceptance.
Considering the above, you will agree with me that many pension reform acts have been put in place since independence, but the questions poping up are: Are these pension funds well managed? Are the investment owners (pensioners) happy the way their hard-earned income is being managed? Certainly Not!
The pensioners are rather agitating for liberty to withdraw their whole sum to operate the kind of investment they want on their own since the sum given to an average pensioner is not up to the investment the administrator makes on his/her capital.
Moreso, there has also been clear evidence that pension funds managed by different companies achieve different results, although all of them operate in the same market conditions. Therefore, the proven assumption is that the results achieved by the pension funds depend on how well they are managed or more specifically on whether all decisions taken by management are in favour of the funds participants.
Recently, ideas and methods of corporate governance were offered to be applied to pension fund management. This methodology was developed in order to ideal with the so-called “principal agent problem” when shareholders, due to their large numbers and different locations, cannot organise themselves and ensure that company’s managers work exclusively for shareholders, rather than for their own interests. It would rather not be acceptable to use the term “corporate management” for the management of pension funds as the pension fund and the company have same essential differences.
The pension fund as we know, can have hundreds of thousands, of participants living in different areas who do not even know each other and hence, unable to organise themselves in order to reach an over-all agreement and to represent it. Similarly, the pension funds managing companies are subjected to this kind of problem too, that is, how to align the interests of the pension funds participants and those of the pension managing company’s shareholders.
The implication is that, the pension fund can be influenced by many interest parties who have different or even contradicting interests, all of them trying to divert fund management decisions “towards their interest’, thereby playing down or disregarding the interest of the pensioners who own these funds.
On this note, it is necessary to protect the interest of the pensioners who are still alive because a lot of them die, on daily basis like chickens. Their outstanding statement or outcry is that “the pension manipulators should be stopped and they (pensioners) be given the liberty to either withdraw their full sum of money for the investment that suits their interest or should be given their desirable investment.
I salute the recent Senate move to give the pensioners a new breath of life as they took a positive step in the right direction to provide succour to retirees who face grave difficulties in withdrawing their savings. The move by the Senate to amend the Pension Reform Act 2014 to allow retirees have access to 75 percent of their retirement saving will certainly give the pensioners a sigh of relief. Most of them are dead, while the living among them are wallowing in abject poverty with nothing to show for after their years of faithful service to their fatherland.
I, therefore, charge the government to change the present pathetic situation of the pensioners. Practical efforts must be made by the government, otherwise, the pensioners will continue to languish in pain and poverty and the death rate will continue to rise.
Government must do everything to protect the interest of the pensioners by ensuring that the pensioners have full access to their funds for effective management by themselves.
Workers, whether in public or private sectors, are expected to live comfortable life devoid of any form of dependency after retirement from active service; Therefore, the Federal Government has a role to enact favourable laws to ensure that the pensioners have full access to their investment or fund to enable them live a better and purposeful life after retirement.
Udofia writes from Western Delta University.

Ima-Obong Udofia