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| The sorry state of the Nigerian pensioners. |
“This is not only a monumental fraud, but a national embarrassment. This is one report that the government should not ignore, it should be implemented.”
- Former Senate President, David Mark,
Thursday, June 21, 2012.
Thursday, June 21, 2012.
HISTORICAL BACKGROUND
Attempts at curbing corruption in the management and disbursement of pension funds in Nigeria to eligible pensioners or retirees by the Federal Government started with the introduction of the pension reforms of 2004 by the administration of the former President Olusegun Obassanjo which led to the introduction of pension administrators and establishment of Pension Commission (PENCOM), with a possibility of ending the yearly agonies of pensioners across the country.
But as a country where corruption thrives in whatever dimensions it is perpetrated, the pension fund thieves in the system quickly changed tactics of looting the funds, especially in establishments that are not directly covered by PENCOM like the police and most of the other para-military agencies in the country where petitions bordering on management of pension funds by various managers led to the formation of the Pension Reform Task Team (PRTT) in June 2010 under the leadership of Alhaji Abdul Rasheed Maina, an Assistant Director in the Federal Civil Service.
The Maina-led PRTT which had other serving public servants like B.G Kaigama, A.O Leke, I.M. Adoke, G.T. Idris, F.T. Bankole and Ibrahim Abdulkarim as members, was saddled with the responsibility of restructuring the civil service and police pensions in a way that would guarantee a new seamless organogram, developing a robust, data base that can be extended to all pension offices in the country, develop an e-payment platform for all pensioners towards stabilisation of prompt monthly pension payment and above all, produce a smart identification card for all pensioners as a way of putting an end to the monumental fraud in the system over the years.
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| Alhaji Abdul Rasheed Maina. |
Although the Maina led PRTT at the beginning of carrying out the assignments it was saddled with, made some remarkable head ways in busting the pension fund scam syndicate in both the Federal Civil Service and the Police, but it later got embroiled in the scam in less than two years of its operation, making President Jonathan to again in September 2011 order a further review of the pension scheme system by the Minister of Finance and Coordinating Minister for the Economy, Dr. Ngozi Okonjo-Iweala who mandated KPMG as one of the leading auditing firms in the country to look into the records of pension funds management at the Federal Public Service.
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| The Task Force Team headed by Abdulrasheed Maina, tendering an Exhibit to to the distinguished Senate Committee during the Public Hearing on the comprehensive investigation of Pension Management Payment Administration, held in the National Assembly. |
For instance, Maina whose task force had earlier prided itself of helping the country to save N151.6 billion and $6 million from 2010 to December 2011 arising from discovery of overinflated figures of pension funds in the police where N5billion was usually budgeted for as against N1.6billion, bringing about savings records of N3.4billion on monthly basis, got dragged into the fray of pension funds looting through allegations of fraud levied against him by the Assistant Chief Accountant in the Police Pension office, Toyin Ishola and some other officers of the police pension office.
Ishola, the accountant in a plethora of allegations made against Maina before the joint committee, stated that PRTT boss was not as clean as being painted by the reports in the media then. He said:
“Maina's task team within a three months period unilaterally opened three accounts in different banks without recourse to extant rules and approval from the Accountant General of the Federation and the Honourable Minister of Finance.
Ishola, further alleged that PRTT led by Maina, distorted the existing police pension account by illegally transferring the sum of N21billion into three different accounts domiciled in Fidelity Bank (N8billion), UBA (N3billion) and First Bank (N10billion) adding that one of the accounts, the N8billion domiciled in Fidelity Bank Central Business District in Abuja was allegedly put in the account of one Danjuma Zubairu, younger brother to Maina.
His words: “It was gathered that the account in Fidelity Bank, central business district branch, was domiciled in the account of the younger brother of the Chairman Pension Reform Task Team named Danjuma Zubairu and the said amount was fixed since then, with a monthly interest of over N100million into the coffers of the perpetrators of the act. N3billion was deposited in UBA with no proper documentation up till date Ishola informed the committee further that Maina-led task force came into police pension office in December 2011 after having been mandated by the Head of Service to supervise the biometric data capturing of the police pension office within three months. He said that task force was expected to hand over the biometric data to the Director of the Police Pension Commission, Y.K. Adeyemi but didn't do so aside overshooting its period of assignment and its chairman indulging in frivolous and extravagant expenditures. He explained, thus:
“Among these expenditures were the bogus expenditure of the conduct of the biometric exercise of the retirees in the Diaspora, on which he spent a whopping sum of N240 million for capturing of less than 20 retirees and for the local biodata of which over N220 million was spent, aside over N3.6billion spent by the Maina-led committee without any entry of such in account books.
Expectedly miffed by Ishola and other officials of police pension office's allegations against the Maina-led PRTT, the joint committee immediately summoned Maina to appear before it along with the Chairman of EFCC, Ibrahim Lamorde who was mentioned as one of those who collected grants without travelling for a pension verification exercise.
THE SENATE INTERVENTION
Deeply disturbed by massive allegations of monumental corruption and inefficiency in the management and administration of pension funds in the country, the Senate had at its sitting of Wednesday, 2nd November, 2011 passed a resolution mandating its Committee on Establishment and Public Service, and States and Local Governments, under the Chairmanship of Senator Aloysius Etok with Senator Kabiru Gaya as Co-Chairman, “to undertake a comprehensive investigation, including public hearing, into the payment of pensioners, management and administration of pension funds in Nigeria.” This specific assignment was pursuant to sections 88 and 89 of the 1999 Constitution [as amended].
In what looked like a marching order for the committee to spring into action on unmasking racketeers of the pension funds among its managers, the senate President, David Mark while declaring open the public hearing of the joint committee in February last year declared thus: “Those feeding fat on pension funds are swimming in blood money and must be identified and severely punished by the laws of the land, because it is ungodly for labourers to work in their prime and save for stress-less old age, but later denied the fruits of their labour.
This committee must help this country to unearth those not allowing the pension fund scheme serve the purpose(s) for which it was set up for through mindless stealing or should one say looting of money meant for pensioners …'
In the course of its public hearing, the Committee received a total of 5,608 written submissions from various pensioners unions and individual pensioners, while a total of 316 persons representing various unions, associations and individuals [both public and private] testified before it and presented submissions which were admitted as exhibits.
At the end of its onerous assignment, the Committee submitted its report to the Senate with a total of 104 recommendations which was adopted on June 21, 2012 by the Upper Legislative Chambers after a thorough debate of the Committee report.
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| Former President Olusegun Obasanjo, introduced pension reforms in 2004 to enhance proper pension administration in Nigeria. |
The report revealed that from 2005 to 2011, top government officials in charge of pension funds in the country devised and administered a system through which they mindlessly and systematically looted pension funds to the tune of N273.9 billion. It revealed further that out of the total sum of N1.025 trillion received as pension funds by the various pension offices and boards within the period, only N751.4 billion was expended, with N273.9 billion looted.
Indeed, the probe panel observed what it described as syndicated and institutionalized corruption, fraud and embezzlement in the management of pension funds in the country.
According to the report, out of the N213.3bn pension funds received by the Office of the Head of Civil Service of the Federation, only N154.6bn was disbursed; while the Military Pension Board disbursed only N294bn out of the N317.6bn it received. The report also reveals that the Customs, Immigration and Prisons Pension Office paid only N57.4bn out of the N85.2bn released to it; the Department of State Service Pension Office, N9.4bn out of N34.7bn; and the Police Pension Office, N88.2bn out of N131.4bn. Details further shows that within the period under review, out of the N176.4bn received by other parastatals as pension funds, only N100.6bn was expended; while only N46.9bn was spent out of the staggering sum of N55.8bn released for the payment of retirees of universities across the nation. This was made possible, according to the committee, because of beneficial collusion and conspiracy by government officials including some unscrupulous bank officials.
The report recommended, among other things, the prosecution of Chairman of Pension Task Force Team, (PTFT), Abdulrasheed Maina, and other members of the team (including Mr. John Yusuf and B. G. Kaigama) for a litany of corruption-related offences. The “Hallowed Chambers” specifically listed the “charges” to include fraud, embezzlement, misappropriation, misapplication, outright stealing of pension fund, illegal virement, contract splitting and award of contract to non-existing companies without appropriation.
Apart from demanding that all misappropriated pension funds should be recovered by the Executive arm of government, the Senate also recommended the prosecution of officials of the task team drawn from the security services found to have been involved in acts of corruption and diversion of pension funds. The Economic and Financial Crimes Commission (EFCC), the State Security Service (SSS), the Nigerian Prison Service, the Nigerian Immigration Service, and the Independent Corrupt Practices and other related offences Commission (ICPC) all had some officers seconded to the team.
According to the Senate's recommendations, the task team, which was set up in June 2010, should be compelled to present all of its financial records to the Auditor General of the Federation.
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| Senators Kabiru Gaya and Aloysius Etok, were appointed by the Senate to undertake a comprehensive investigation into the payment of pensioners. |
Shocked by the mind-boggling revelations contained in the report, Senate President, David Mark, who described the Pension scam as a “monumental fraud” and a national disgrace and embarrassment,” said the Senate would “insist that our recommendations are implemented. I am disturbed that the government could pay its own share of pension funds without putting in a system in place to monitor and check what is happening.
“The individuals who are involved, if they did not have a leeway, they would not have contemplated what they have done; so, for any living human being to have stolen the money of those who have laboured for this country, I think it is only God who can decide their fate. But as human beings, we have just made our recommendations and hope that the Almighty God will see them to hell.”
SPECIFIC OBSERVATIONS/FINDINGS OF THE REPORT ON EACH PENSION OFFICES
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| Ibrahim Lamorde, former Chairman of EFCC, was mentioned as one of those who collected grants without travelling for a pension verification exercise. |
[A] Pension Department, Office of the Head of Service of the Federation [HOSF]; the committee made the following discoveries, observations and findings:
*That the process of enrolment as pensioner in the Department are not prescribed in any extant law but are managed in accordance with precedents, administrative procedures and circulars with the pension office having the final discretion on who has met the clearances for enrolment as pensioner and the actual payment thereto; which is prone to unbridled abuses and corruption.
*That there is dearth of international best-practice and direction in pension system management resulting in near collapse of the pension system with its attendant vulnerability to corruption and other unethical practices;
*There is syndicated and institutionalized corruption, fraud and embezzlement in the administration of the payment of pensioners and administration of pension funds in the department which is programmed in such a manner that most relevant officials or personnel posted to the department become beneficiaries whether in or out of office;
*That this institutionalized corrupt system above is made perpetually possible because of beneficial collusion and conspiracy by most relevant officials in or out of office;
*That because of syndicated and institutionalized, inter-departmental and inter-agency collusion and perpetual vested benefits/interest, coupled with the huge financial powers in the hands of the perpetrators, it has become extremely difficult to detect and sift out fake pensioners from the genuine ones which have been entangled and mingled deeply over the years under the old pension system;
*That verification exercises which have become a quarterly routine in the department are only 'facades to fulfil all righteousness and a decoy to expend the funds appropriated for that purpose. This is because the fake and dead pensioners which the exercises are intended to weed out are protégé of the relevant pension officials. Only the genuine dead pensioners whose families do not have 'godfathers' at the pension department are immediately weeded out.
HEAD OF SERVICE PENSION DEPARTMENT
On the Pension Task Team set up by the Head of the Civil Service of the Federation during the tenure of Chief Orosanye, the Senate probe Committee found as follows:
*That the Task Team was said to have been set up to carry out biometric verification of pensioners and to reform the pension department of the office of the Head of the Civil Service of the Federation as a result of the perceived/alleged rot in that office. However, neither the Head of Service nor the Task Team Chairman could produce letter of appointment to that effect and the terms of reference thereto;
*That the Task Team began a fresh biometric data capturing and pension verification exercise in the country without recourse to the fact that such exercise has been done up to 90% completion with the sum of over N234,000,000.00 [Two Hundred and Thirty Four Million Naira Only] expended thereto by the pension department that same year;
*That because the Task Team did not have back up files and data to verify the particulars of the pensioners, the names of all the aged pensioners some of whom are over 85 years who might have misplaced, lost or could not produce the needed documents [letters of first appointment/gazette, letters of last promotions and retirements and other clearance particulars] were removed from the pensioners payroll without being captured. The Task Team therefore declared aged pensioners [some of whom have received their pension for up to 20 years] as ghost pensioners thereby removing about 71,133 pensioners from the payroll and reducing the list of pensioners from 141,790 to 70, 657; leaving out so many aged pensioners in suffering;
*That the Task Team also enrolled into the pension payroll 49, 395 completely new set of pensioners who had never been enrolled, and are paying same without the mandatory pre-payment audit by the Office of the Accountant General of the Federation and other mandatory clearance and also refused to submit same for audit, thereby bringing the total list of the pensioners to 120,733.
THE POLICE PENSION OFFICE
The probe Committee observed as follows;
*There is a syndicated and institutionalized corruption, fraud and embezzlement system in the administration of the payment of pensioners and administration of pension funds in the Police Pension System. This is programmed in such a manner that every relevant official or personnel posted to the office becomes a perpetual beneficiary, whether in or out of office.
*That officials of the Police Pension Office who are vested with unchecked discretionary powers and functions of determining the final enrolment as pensioners and the payment of pensioners thereto, have enrolled as pensioners several persons who had not served in the police service with forged and false documentation; thereby drawing huge fraudulent returns to themselves.
*That there is no reliable, credible and verifiable pension nominal roll in the Police Pension Office. The one being used at present is bedeviled with fraud;
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| Chief Stephen Orosanye, the former Head of the Civil Service of the Federation, set up the Pension Task Team. |
*There were several complaints, petitions and reports of under-payment, over-payments and non-payment of monthly pension, pension arrears and gratuities;
*That the Task Team transferred over N40 billion being pension funds to new bank accounts opened by the Team without authorization from the Accounting Officer in violation of the financial regulations;
*That pension funds were removed and paid into the accounts of members of the Task Team and other individuals two weeks before the memorandum for the approval of the journey by Task Team Chairman was raised. This reveals that pension funds were actually siphoned and the Diaspora biometric data capture was only conceived in order to cover up their track;
*The Chairman of the Task Team, Mr. Maina is being guarded by over 39 security operatives of which 24 are Mobile Policemen and others from SSS, Customs, Immigration and Prisons with a bi-weekly Duty Tour Allowance of N4, 960 million being paid to them from the pension funds.
*That while the Task Team claimed to have reduced monthly expenditure of Police Pension and running cost from N1.5 billion to N500, 000,000.00 [Five Hundred Million Naira Only] monthly, the Committee observed that the Task Team spent N24,800,999,150.96 [Twenty Four Billion Eight Million Nine Hundred and Ninety Nine Thousand one Hundred and Fifty Naira Ninety Six Kobo] instead of N6 billion.
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| A group photo of the Senate Committee on the pension probe. |
GENERAL RECOMMENDATIONS
The Senate probe Committee made some of the following recommendations;
*That the constitutional provisions of section 173 [3], which states that pension, should be reviewed every five years or whenever there is review of the remuneration of Public Servants should be strictly adhered to. Harmonization of pension should be done to ensure uniformity of pension amount irrespective of years of retirement.
*That the outstanding pension fund balances of N273, 941,568,915.55 [Two Hundred and Seventy Three Billion, Nine Hundred and Forty one million, Five Hundred and Sixty Eight Thousand, Nine Hundred and Fifteen Naira, Fifty Kobo] in all the pension offices of the Federal Government be mopped up by the Accountant General of the Federation and be used to settle all outstanding pension entitlements.
*All officers from the EFCC, ICPC and the SSS who were co-opted by the Pension Task Team and found to have colluded, aided and abetted corruption, diversion and siphoning of pension funds and have been used for inappropriate duties should be withdrawn, investigated, arrested and prosecuted accordingly;
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| Senators Helen Esuene and Kabiru Gaya, during one of the pension probe panel sittings. |
*That government should provide free medical care to aged pensioners and other Nigerians above the age of 70 years. The PFAs/PFCs should complement Government effort in this area as their corporate social responsibility.
The report further recommended the prosecution of the Chairman of the Pension Task Force Team, (PTFT), Abdulrasheed Maina, and other members of the team (including Mr. John Yusuf and B. G. Kaigama) for a litany of corruption-related offences. The “Hallowed Chambers” specifically listed the “charges” to include fraud, embezzlement, misappropriation, misapplication, outright stealing of pension fund, illegal virement, contract splitting and award of contract to non-existing companies without appropriation.
He who troubleth his own house,shall inherit the wind.
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