Pension fraud: ICPC uncovers ‘lost’ N23bn pension funds

By SEGUN ODUNEWU

WHEN the new pension scheme was set up in 2004, many Nigerians had anticipated a smooth passage to retirement with enough funds to cater for their golden years.
However, because of inaccurate information and legal laxities, many Nigerians have been defrauded of their contributions.
Just recently, the Independent Corrupt Practices and Other Related Offences said it uncovered over N23 billion pension funds ‘supposedly lost’ in 40 different bank accounts. The commission stated that after the consolidation of the said accounts into four, it was able to recover N496 million in accrued interests on one of the account.
Chairman of the commission, Mr. EkpoNta, made the disclosure at the maiden town hall meeting of the ICPC in Makurdi.
“The commission discovered that the National Pension Commission (PENCOM) was not remitting deductions from employees’ salaries to their respective Retirement Savings Accounts (RSAs) owing to inaccurate information.”
He said with the intervention of ICPC the sum of N34.5 billion has been remitted to 97, 842 employees’ RSAs. Nta further revealed that while conducting systems review of personnel cost expenditure profile across Ministries, Departments and Agencies (MDAs) over a period of four years, ICPC compelled the return of over N6 billion unspent balances into government treasury.
Under the Defined Benefit Pension Schemes, Six civil servants were charged to court for their alleged complicity in the illegal diversion of N32.8 billion from the Nigeria Police Pension Fund between January 2009 and June 2011.
Former head of the Nigerian civil service, Steven Oronsaye was also invited by Economic and Financial Crimes Commission over an allegation of fleecing the pension’s monies in the notorious biometric enrolment scam carried out by the pension task team headed by AbudlrasheedMaina.
Oronsanye, as Head of the Civil Service of the Federation, was linked to the fraud going on under the pension’s task team and authorized siphoning of billions meant for pensioners.
Government officials in charge of pension funds in the country stole N237.9 billion through a syndicated and institutional corruption; Fraud and embezzlement in the management of pension funds, N159 billion in properties and cash recovered from pension fraudsters; N5.6 billion pension scam in Oyo State; N3 billion pension scam in Kano State and £2,204,814.18 belonging to PHCN Staff Pension Fund found in UK account and; Officer confesses before an Abuja High Court that he connived with others and stole N23 billion. The list of alarming headlines on pension scams in Nigeria is so much that if all the monies involved are totaled, it would probably rank as one of the biggest around the world.
Nigerian pension scammers have over time taken advantage of the lax regulatory and legal environment for Pension Funds and either directly embezzled such monies by transferring them to their personal accounts or pretended also to be investing them. The callous acts contributed to the inability of many organizations not being able to fulfill their pension obligations to the pensioners.
While the Defined Benefit Pension Scheme that was prevalent in Nigeria before the enactment of the Pension Reform Act and the coming of the Pension Commission was fraught with fraud, many heaved a sigh of relief with the new dispensation of Contributory Pension Scheme. At least, it was expected that it would curb the corrupt tendencies of operators and pension managers, who were in most cases also staff of such organizations.
Former Finance, Okonjo-Iweala said this much when she disclosed that the Nigeria’s pensions system had become inefficient over the years with several billions of naira in arrears and strong allegations of fraud and looting. This, according to her, led to the pensions’ probe carried out by the National Assembly in 2013, which estimated that some N32 billion had been illegally carted away and over 14 individuals are currently standing trial today as a result.
Dr. Okonjo-Iweala said: “In the light of the widespread fraud that was revealed and his commitment to the welfare of pensioners, former President GoodluckEbele Jonathan took bold steps to consolidate pension reforms and clean up the mess in the system.
As a result, Jonathan, according to her, supported the establishment of the Pensions Transitional Arrangement Department (PTAD) in line with the provisions of the Pensions Reform Act passed in 2004.
The Pension Transitional Arrangement Directorate (PTAD), the body charged with the management of Defined Benefits Schemes in the country was established in August 2013 Established in August 2013 in line with provision of Section 30(2) (a) of the Pension Reform Act, 2004 and now Section 42 (1) of the Pension Reform Act 2014.
Under the Contributory Pension Scheme (CPS), a worker who retired mandatorily on attaining 60 years of age or 35 years in service or retired voluntarily on attainment of 50 years of age, is expected to present an official notice of retirement/exit from last employer, his last pay slip not less than three (3) months from the date of retirement (stamped and signed by employer) or any evidence of last annual remuneration and a certified true copy of the Retirement Bond certificate if he is retiring from the public sector.
In other to curb the menace of pension fund scam, the Senate passed the Pension Reform Bill which prescribes a minimum of 10 years imprisonment for any person found guilty of stealing pension funds.
The bill also prescribes that any Pension Fund Administrator (PFA) or Pension Fund Custodian (PFC) who misappropriates pension fund will be liable to refunding three times the value of the amount diverted.
Apart from payment of fines and serving required jail terms, the bill also provides sanction of forfeiture of property, asset or fund to the Federal Government on anyone found to have misappropriated pension funds.
It prescribes a fine of N10 million on any PFA which failed to meet the obligations of pension contributors while each of the directors of the firm would pay N5 million as penalty.It further stipulated that a PFA which failed to comply with any provision of the Act “shall be liable to a penalty of not less than N500, 000 for each day that the non-compliance continues.”
Speaking on the importance of the scheme despite the hiccups, Director-General of the National Pension Commission (PenCom), Ms. Anohu-Amazu said sustainable pension systems in Africa were reflective of the emerging consensus of the continent on the need to institutionalise a robust pension system.
She said the government has put in place mechanism that will checkmate any loopholes. According to her the current rapid increase in the size of pension funds in the continent had provided a rare opportunity for multi-sectoral collaboration in bridging Africa’s infrastructure deficit.