The Nigeria Labour Congress (NLC) has voiced concerns about the current pension scheme, claiming it impoverishes workers upon retirement. According to NLC President Joe Ajaero, the scheme fails to secure financial stability for retirees, resulting in severe consequences for their well-being.
During a retirement summit in Abuja, themed “Challenges, Strategies, Prospects and Opportunities at Retirement in Nigeria,” Ajaero criticized the federal government for allegedly owing over N360 billion in pension arrears. He pointed out the instability of the Naira, which depreciates the value of pension contributions, thereby failing to protect retirees’ financial futures.
“The pension scheme, as it currently stands in Nigeria, falls short of its fundamental purpose: to provide for workers in their old age. The unstable value of the Naira has kept depreciating over the years, undermining the scheme’s effectiveness,” Ajaero remarked.
He stressed that pensions should ensure retirees enjoy their later years without financial stress, but many face health challenges and financial difficulties, leading to untimely deaths. This situation impacts the behavior of active workers, who witness the financial struggles of retirees.
Ajaero revealed that the federal government owes nearly N260 billion in pension arrears, with federal parastatals contributing an additional N40 billion. Some states have arrears extending up to eight years, while many private companies are in arrears of up to three years, deducting contributions without remitting them to Pension Fund Administrators (PFAs).
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In 2021, the National Pension Commission (PENCOM) appointed recovery agents to collect N984.23 million from 36 defaulting employers, highlighting the ongoing issues with pension fund management. The Micro-Pensions designed for the informal sector remain inadequately activated, further complicating the financial security of informal economy workers.
Ajaero also mentioned the mismanagement and looting of non-contributory pension funds, recalling high-profile cases like that of Maina and the former Accountant General. He called for statutory agencies to fulfill their responsibilities in protecting workers’ interests.
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