Pension Funds Scam in Nigeria
The senate probe of the management of pension funds and its disbursement has further exposed mind boggling sleaze that has plagued Nigeria's public service. UCHENNA AWOM in this analysis periscopes the unending harrowing revelations that have dispatched many Nigerian elder citizens to their untimely graves
These people, the administrators stealing pension funds, can never live in peace because the prayers of these old men and women who have diligently served the country will haunt them and their children's children". This was the curse delivered by an angered Senate President David Mark while recently trying to make sense of the scope of rot in the pension management turf.
At last count, the amount said to have been stolen amounts to about N156 billion. Perhaps, most disturbing was the brazen falsification of documents to withdraw the pension funds that will not get to the beneficiaries.
Worse, the civil servants that are direct custodians of the pension benefits find no fault to even steal death benefits. The import is that the person who delights in stealing death benefits can also steal dead bodies.
The Revelations
As a sampler, there was a situation where the Senate joint committee heard how officials of the Police Pension Board falsified documents to withdraw N24 billion from the budget office for the payment of pension that required only N3.5 billion.
There were cases where additional N6 billion frauds in the pension scheme allegedly perpetrated by certain staff of the Office of the Head of Service of the Federation (HOF).
They are currently facing court charges. The staff numbering 32 were alleged to have defrauded the country to the tune of N12 billion, but as further investigation intensified an additional N6 billion embezzlement was discovered, bringing the total to N18 billion. As a result, the court charges have been increased to accommodate the new discoveries.
The highly vociferous Chairman of the Pension Review Task Force Team, Maina Abdulrasheed candidly told the Senate Joint Committee on Establishment and Public Service, States and Local Governments headed by Aloysius Etok, that the task force has traced N21 billion of the money in a First Bank account.
He told the committee that the team discovered two major accounts in Lagos where pension fund for the police was lodged and said one account had N21 billion while the other had N24 billion.
Abdulrasheed further disclosed that when he discovered that on daily basis various sums of money from N200 million to N300 million were being withdrawn, he applied to the Accountant General of the Federation for the transfer of the accounts.
In his application, he explained that since the Headquarters of the Police Pension was in Abuja, the accounts should be moved and suggested that two new accounts be opened in Fidelity and UBA banks but that the then Head of Service, Dapo Afolabi told him to hands off the pension fund.
The committee after listening to the submission of Abdulrasheed directed that he make available all relevant documents relating to the transactions including bank statements; cheque books and other documents that would assist the committee in arriving at drawing its report.
In his own revelation, former Head of Service, Steve Oronsaye, who also appeared before the committee revealed that government officials falsified documents to siphon pension fund from the federal government coffers.
He explained that the Accounts Department of the Pension office in the Head of Service was where the collusion and corruption was perfected. "The data was corrupted there. We then decided that we need a new data. The old data showed that we had 141,000 on pay role but when they (the Task Team) went out, they brought 71,000".
Oronsaye said, "the quest for selective payment do not arise during my tenure, when I resumed office the first few files that came on my table were on payment, I was not persuaded by request because it was not in order. If did that the genuine pensioners will suffer for it, the figure kept coming, I was not satisfied in good conscience.
"There was documents presented to me on death benefit, the photograph was quite different from the name because I know the person bearing that name; there are many of such forged documents that was why I recommended biometric exercise and until we have people of integrity the problem with the administration of pension fund will still continue.
"We discovered that were people retired in the 60s that are not paid, there were people came with fake documents during biometric exercise, until we purge the system there is nothing we can do.
There is this erroneous belief that Federal government will contribute five percent into pension fund is not correct, it is the responsibility of states and local governments to take care of their pensioners, the federal government just want to be like big father to support, this was just the circular not a law, from the beginning the circular was cleared".
Counter Revelations...Arrest Warrant
It was a case of the hunter becoming the hunted. An incensed Senate Panel probing the process on Thursday ordered the Inspector General of Police, Mohammed Abubakar to arrest and produce the Chairman, Pension Reform Task Force Team, Abdulrasheed Maina.
He was scheduled to make the man available to the Committee by 10 am the following day over alleged embezzlement of Police Pension Fund. It could be recalled that it was Maina who vociferously exposed the gory details of how the police and other pension funds were embezzled. But in a twist of fate a counter revelation from the police roped him in.
The order was sequel to the revelations made by Assistance Chief Accountant, Police Pension Office, Mr. Toyin Ishola last Thursday wherein he alleged that the most dangerous man in the orgy of sleaze was the task force helmsman himself who had mounted the witness box on Wednesday to spill some beans.
Another reason was that Maina failed to appear before the committee on Thursday apparently sensing that the police board was going to ambush him with facts that suggests that he was neck deep in the scam
The committee sensing danger however directed the Police to ensure the safety of Ishola as well as others who testified during and after the investigation. Ishola, they said, is a key witness.
Ishola during his submission had alleged that the sum of N240million was expended on fictitious data capturing operation of only 20 pensioners in Atlanta, Georgia. Further revelations showed that most of the people on the delegation were not members of either the Police Pension Commission or Head.
Also he claimed that Maina distorted existing Police Pension account, transferring a total of N21billion into three different accounts including Fidelity Bank, N8billion, UBA, N3billion and First Bank, N10 billion. "The task team within three months period unilaterally opened three accounts in different banks without recourse to extant financial rules and approval from the Accountant General of the Federation and the Honourable Minister of Finance
"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 up till date with no proper documentation has been effected."
Ishola further disclosed that the taskforce team came into Police Pension Office in December 2011 with a mandate from the Head of Service to supervise the Biometric data capturing of the Police pension office within three months after which he was expected to hand over the biometric data platform to the Director of Police Pension Commission, Mr. Y.K. Adeyemi.
"However, it was observed that within the period of the assignment, the chairman of the task force team had exceeded his mandate by engaging in frivolous and extravagant expenditures, which were beyond his mandate. Among these expenditures was the bogus expenditure of the conduct of the biometric exercise of the retirees in the Diaspora, which he spent a whooping sum of N240million to capture less than 20 retirees and for the local bio data of which over N220million was spent."
According to him, these were just part of activities carried out by the task team within three months of its tenure in Police pension office of which over N3.6billion was spent without any entry of such in account books.
"The chairman, Pension Reform Task Team, who always claims he is saving government money has now embarked on frivolous spending without control or putting into consideration the reconciliation aspect of the office and also, disregarding the financial regulation guiding all government expenditures."
To cover his activities, Ishola revealed that Maina had engaged the services of members of staff of EFCC and ICPC as his buddies, some of who are on his payroll. "He has also engaged the EFCC and ICPC officials as his buddies hence, some of them are on his payroll so as to use them for his game plan."
How Many Nigerian Pensioners?
On the flip side, Abdulrasheed, told the senators that as at December 2011 a total of 49,395 pensioners including those who retired as far back as 1968 who had never been enrolled have now been verified and their biometrics captured, bringing the total number of pensioners on the payroll to 120,733.
"Prior to biometric exercise, government had been paying 141,792 pensioners up to the tune of about N3.3 billion as regular monthly pension; following the exercise, it was found that 70,657 pensioners were qualified and eligible to draw regular monthly pension out of 141,790 pensioners who were hitherto on the payroll. N825 million from the N3.3 billion previously paid by government, which amounts to N1,387,994,803.40 will serve as monthly savings", he told the panel.
Similarly, the PRTT boss told panel that, between N800 million and N900 million were being paid monthly by government as arrears and death benefits respectively to pensioners, but that interviews with pensioners and next of kin on file, revealed that the arrears and death benefits had not been paid to them.
Nonetheless, he enumerated other achievements of the PRTT to include: "reduction of pension wage bill from N5bn to N1.6 monthly resulting in N3.4bn savings from June 2010 to December 2011".
He asserted that the PRTT discovered and reported to the EFCC colossal loss of pension funds by the former management and staff of the OHCSF pension where the N24 billion and Landed properties carted away were recovered and that the case was currently in the Federal High Court, Maitama, Abuja.
"Due to diligence of the PRTT, N35 billion is sitting in various banks of the OHCSF pension office; another N28 billion was saved from the restructuring of the Police Pension Office, the team was directed to stop the restructuring half way. Six million pounds sterling is currently with Crown Agents in London and the total amount excluding recovered properties is now N151.6 billion and six million pounds.
Also making clarifications on the PRTT time limit, the former HCSF Mr. Steve Oronsanye explained: "by my very training, I can't set time for a task which I cannot define", adding, "don't forget, I was on my way out".
He added that the scope of the PRTT work was to "capture; pay on-the-spot; and harmonize when you return; It was an institutionalized team comprising administrative officers from the service and law enforcement officers because, we thought there would be collusion".
But the Director General of Pensions Commission, Mohammed Kabiru Ahmed told journalists that at the end of last year, the industry generated N4.2trillion. This funds he said can be invested and then it is being invested. "And that may include infrastructure, housing and any other relevant investment. For now pension asset are not being used to grant loans largely because we want to avoid temptation of getting somebody to grant loan that he cannot recover."
"In terms of deductions and none remission, as a commission we are already setting up a commission and in the next few weeks we are going to have a workshop which will include accountants and lawyers who will go to different parts of this country to make sure that any employer that deduct and refuse to remit is compel to do that.
What we want to do is to get the National Assembly to amend the pension reform act to make it a criminal offense so that individuals that are responsible for that could be prosecuted", he said.
Now The 'Curse'
It was a mind boggling revelation that incensed stakeholders and Nigerians alike. The import is that pension fund managers not only have defrauded the government but have virtually and systematically snuffed life out of many of the nation's senior citizens. It is an ugly situation which did not change the oft-held views that the pension sector is a 'house' of fraud and one that depicts all that is evil in the public service.
Of course the situation forced a very hapless President of the Senate, David Mark to literarily place a curse on various custodians of pension funds in the country for enriching themselves with the legitimate entitlements of retirees.
The old negative stories, which was eventually confirmed at the hearing informed Mark's disposition. He spoke regretfully while declaring open the public hearing organized by the Senate Committee on Public Service and Establishment.
He said it was unfortunate that many of these administrators could take pleasure in 'living on blood money'. Represented by the Senate Majority Leader, Senator Victor Ndoma-Egba, he said it is "evident that those saddled with the responsibility of managing pension funds were among the richest in the country adding that "it is because they are stealing the pensioners' entitlements to enrich themselves.
These people, the administrators stealing pension funds, can never live in peace because the prayers of these old men and women who have diligently served the country will haunt them and their children's children. I implore the committee to unravel all the issues pertaining to the mismanagement of pension funds in the country and bring the perpetrators to book. Let me assure that this committee has the full backing of the Senate on this", he said.
Continuing he said; "The moral strength of the nation is determined by two terms. The first is how that nation treats the most vulnerable of the society and the second is how it shows appreciation to those who have served the nation faithfully.
Pensioners are pensioners because they have served their nation faithfully and on retirement, because usually, retirement is after you have done several years, you become a part of that vulnerable operation.
"Government must be for those who need government the most and usually, it is the most vulnerable who should need government most. How have we projected pensioners who are most vulnerable in our midst? Can we truly say that as a nation, we have shown appreciation to these old men and old women, who gave their best of their youths to their country?
The senate probe of the management of pension funds and its disbursement has further exposed mind boggling sleaze that has plagued Nigeria's public service. UCHENNA AWOM in this analysis periscopes the unending harrowing revelations that have dispatched many Nigerian elder citizens to their untimely graves
These people, the administrators stealing pension funds, can never live in peace because the prayers of these old men and women who have diligently served the country will haunt them and their children's children". This was the curse delivered by an angered Senate President David Mark while recently trying to make sense of the scope of rot in the pension management turf.
At last count, the amount said to have been stolen amounts to about N156 billion. Perhaps, most disturbing was the brazen falsification of documents to withdraw the pension funds that will not get to the beneficiaries.
Worse, the civil servants that are direct custodians of the pension benefits find no fault to even steal death benefits. The import is that the person who delights in stealing death benefits can also steal dead bodies.
The Revelations
As a sampler, there was a situation where the Senate joint committee heard how officials of the Police Pension Board falsified documents to withdraw N24 billion from the budget office for the payment of pension that required only N3.5 billion.
There were cases where additional N6 billion frauds in the pension scheme allegedly perpetrated by certain staff of the Office of the Head of Service of the Federation (HOF).
They are currently facing court charges. The staff numbering 32 were alleged to have defrauded the country to the tune of N12 billion, but as further investigation intensified an additional N6 billion embezzlement was discovered, bringing the total to N18 billion. As a result, the court charges have been increased to accommodate the new discoveries.
The highly vociferous Chairman of the Pension Review Task Force Team, Maina Abdulrasheed candidly told the Senate Joint Committee on Establishment and Public Service, States and Local Governments headed by Aloysius Etok, that the task force has traced N21 billion of the money in a First Bank account.
He told the committee that the team discovered two major accounts in Lagos where pension fund for the police was lodged and said one account had N21 billion while the other had N24 billion.
Abdulrasheed further disclosed that when he discovered that on daily basis various sums of money from N200 million to N300 million were being withdrawn, he applied to the Accountant General of the Federation for the transfer of the accounts.
In his application, he explained that since the Headquarters of the Police Pension was in Abuja, the accounts should be moved and suggested that two new accounts be opened in Fidelity and UBA banks but that the then Head of Service, Dapo Afolabi told him to hands off the pension fund.
The committee after listening to the submission of Abdulrasheed directed that he make available all relevant documents relating to the transactions including bank statements; cheque books and other documents that would assist the committee in arriving at drawing its report.
In his own revelation, former Head of Service, Steve Oronsaye, who also appeared before the committee revealed that government officials falsified documents to siphon pension fund from the federal government coffers.
He explained that the Accounts Department of the Pension office in the Head of Service was where the collusion and corruption was perfected. "The data was corrupted there. We then decided that we need a new data. The old data showed that we had 141,000 on pay role but when they (the Task Team) went out, they brought 71,000".
Oronsaye said, "the quest for selective payment do not arise during my tenure, when I resumed office the first few files that came on my table were on payment, I was not persuaded by request because it was not in order. If did that the genuine pensioners will suffer for it, the figure kept coming, I was not satisfied in good conscience.
"There was documents presented to me on death benefit, the photograph was quite different from the name because I know the person bearing that name; there are many of such forged documents that was why I recommended biometric exercise and until we have people of integrity the problem with the administration of pension fund will still continue.
"We discovered that were people retired in the 60s that are not paid, there were people came with fake documents during biometric exercise, until we purge the system there is nothing we can do.
There is this erroneous belief that Federal government will contribute five percent into pension fund is not correct, it is the responsibility of states and local governments to take care of their pensioners, the federal government just want to be like big father to support, this was just the circular not a law, from the beginning the circular was cleared".
Counter Revelations...Arrest Warrant
It was a case of the hunter becoming the hunted. An incensed Senate Panel probing the process on Thursday ordered the Inspector General of Police, Mohammed Abubakar to arrest and produce the Chairman, Pension Reform Task Force Team, Abdulrasheed Maina.
He was scheduled to make the man available to the Committee by 10 am the following day over alleged embezzlement of Police Pension Fund. It could be recalled that it was Maina who vociferously exposed the gory details of how the police and other pension funds were embezzled. But in a twist of fate a counter revelation from the police roped him in.
The order was sequel to the revelations made by Assistance Chief Accountant, Police Pension Office, Mr. Toyin Ishola last Thursday wherein he alleged that the most dangerous man in the orgy of sleaze was the task force helmsman himself who had mounted the witness box on Wednesday to spill some beans.
Another reason was that Maina failed to appear before the committee on Thursday apparently sensing that the police board was going to ambush him with facts that suggests that he was neck deep in the scam
The committee sensing danger however directed the Police to ensure the safety of Ishola as well as others who testified during and after the investigation. Ishola, they said, is a key witness.
Ishola during his submission had alleged that the sum of N240million was expended on fictitious data capturing operation of only 20 pensioners in Atlanta, Georgia. Further revelations showed that most of the people on the delegation were not members of either the Police Pension Commission or Head.
Also he claimed that Maina distorted existing Police Pension account, transferring a total of N21billion into three different accounts including Fidelity Bank, N8billion, UBA, N3billion and First Bank, N10 billion. "The task team within three months period unilaterally opened three accounts in different banks without recourse to extant financial rules and approval from the Accountant General of the Federation and the Honourable Minister of Finance
"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 up till date with no proper documentation has been effected."
Ishola further disclosed that the taskforce team came into Police Pension Office in December 2011 with a mandate from the Head of Service to supervise the Biometric data capturing of the Police pension office within three months after which he was expected to hand over the biometric data platform to the Director of Police Pension Commission, Mr. Y.K. Adeyemi.
"However, it was observed that within the period of the assignment, the chairman of the task force team had exceeded his mandate by engaging in frivolous and extravagant expenditures, which were beyond his mandate. Among these expenditures was the bogus expenditure of the conduct of the biometric exercise of the retirees in the Diaspora, which he spent a whooping sum of N240million to capture less than 20 retirees and for the local bio data of which over N220million was spent."
According to him, these were just part of activities carried out by the task team within three months of its tenure in Police pension office of which over N3.6billion was spent without any entry of such in account books.
"The chairman, Pension Reform Task Team, who always claims he is saving government money has now embarked on frivolous spending without control or putting into consideration the reconciliation aspect of the office and also, disregarding the financial regulation guiding all government expenditures."
To cover his activities, Ishola revealed that Maina had engaged the services of members of staff of EFCC and ICPC as his buddies, some of who are on his payroll. "He has also engaged the EFCC and ICPC officials as his buddies hence, some of them are on his payroll so as to use them for his game plan."
How Many Nigerian Pensioners?
On the flip side, Abdulrasheed, told the senators that as at December 2011 a total of 49,395 pensioners including those who retired as far back as 1968 who had never been enrolled have now been verified and their biometrics captured, bringing the total number of pensioners on the payroll to 120,733.
"Prior to biometric exercise, government had been paying 141,792 pensioners up to the tune of about N3.3 billion as regular monthly pension; following the exercise, it was found that 70,657 pensioners were qualified and eligible to draw regular monthly pension out of 141,790 pensioners who were hitherto on the payroll. N825 million from the N3.3 billion previously paid by government, which amounts to N1,387,994,803.40 will serve as monthly savings", he told the panel.
Similarly, the PRTT boss told panel that, between N800 million and N900 million were being paid monthly by government as arrears and death benefits respectively to pensioners, but that interviews with pensioners and next of kin on file, revealed that the arrears and death benefits had not been paid to them.
Nonetheless, he enumerated other achievements of the PRTT to include: "reduction of pension wage bill from N5bn to N1.6 monthly resulting in N3.4bn savings from June 2010 to December 2011".
He asserted that the PRTT discovered and reported to the EFCC colossal loss of pension funds by the former management and staff of the OHCSF pension where the N24 billion and Landed properties carted away were recovered and that the case was currently in the Federal High Court, Maitama, Abuja.
"Due to diligence of the PRTT, N35 billion is sitting in various banks of the OHCSF pension office; another N28 billion was saved from the restructuring of the Police Pension Office, the team was directed to stop the restructuring half way. Six million pounds sterling is currently with Crown Agents in London and the total amount excluding recovered properties is now N151.6 billion and six million pounds.
Also making clarifications on the PRTT time limit, the former HCSF Mr. Steve Oronsanye explained: "by my very training, I can't set time for a task which I cannot define", adding, "don't forget, I was on my way out".
He added that the scope of the PRTT work was to "capture; pay on-the-spot; and harmonize when you return; It was an institutionalized team comprising administrative officers from the service and law enforcement officers because, we thought there would be collusion".
But the Director General of Pensions Commission, Mohammed Kabiru Ahmed told journalists that at the end of last year, the industry generated N4.2trillion. This funds he said can be invested and then it is being invested. "And that may include infrastructure, housing and any other relevant investment. For now pension asset are not being used to grant loans largely because we want to avoid temptation of getting somebody to grant loan that he cannot recover."
"In terms of deductions and none remission, as a commission we are already setting up a commission and in the next few weeks we are going to have a workshop which will include accountants and lawyers who will go to different parts of this country to make sure that any employer that deduct and refuse to remit is compel to do that.
What we want to do is to get the National Assembly to amend the pension reform act to make it a criminal offense so that individuals that are responsible for that could be prosecuted", he said.
Now The 'Curse'
It was a mind boggling revelation that incensed stakeholders and Nigerians alike. The import is that pension fund managers not only have defrauded the government but have virtually and systematically snuffed life out of many of the nation's senior citizens. It is an ugly situation which did not change the oft-held views that the pension sector is a 'house' of fraud and one that depicts all that is evil in the public service.
Of course the situation forced a very hapless President of the Senate, David Mark to literarily place a curse on various custodians of pension funds in the country for enriching themselves with the legitimate entitlements of retirees.
The old negative stories, which was eventually confirmed at the hearing informed Mark's disposition. He spoke regretfully while declaring open the public hearing organized by the Senate Committee on Public Service and Establishment.
He said it was unfortunate that many of these administrators could take pleasure in 'living on blood money'. Represented by the Senate Majority Leader, Senator Victor Ndoma-Egba, he said it is "evident that those saddled with the responsibility of managing pension funds were among the richest in the country adding that "it is because they are stealing the pensioners' entitlements to enrich themselves.
These people, the administrators stealing pension funds, can never live in peace because the prayers of these old men and women who have diligently served the country will haunt them and their children's children. I implore the committee to unravel all the issues pertaining to the mismanagement of pension funds in the country and bring the perpetrators to book. Let me assure that this committee has the full backing of the Senate on this", he said.
Continuing he said; "The moral strength of the nation is determined by two terms. The first is how that nation treats the most vulnerable of the society and the second is how it shows appreciation to those who have served the nation faithfully.
Pensioners are pensioners because they have served their nation faithfully and on retirement, because usually, retirement is after you have done several years, you become a part of that vulnerable operation.
"Government must be for those who need government the most and usually, it is the most vulnerable who should need government most. How have we projected pensioners who are most vulnerable in our midst? Can we truly say that as a nation, we have shown appreciation to these old men and old women, who gave their best of their youths to their country?
