By Yekini Lukmon, YKL
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Retirement is an inevitable stage of life. After years of active service, every worker will eventually leave the workforce, whether by choice, regulation or the natural demands of age. Retirement, therefore, should not be regarded as a period of inactivity or irrelevance, but as a well-earned transition into a new phase of life.
No person can remain in active service forever. Every employee will, in due course, become a retiree. Being a pensioner is neither a crime nor a cause for pity. It is a status earned through years of service, sacrifice and contribution to the economic and social development of the nation.
It is, therefore, unacceptable that Nigerians who have spent decades serving the country should struggle to access their legitimate pension benefits at a time when they are advancing in age and require greater care and financial security.
For many pensioners in Nigeria, retirement has become a period marked by financial hardship, administrative bottlenecks and growing health concerns. Accessing retirement benefits can involve bureaucratic delays, repeated documentation and stressful verification procedures. Such experiences should not constitute the reward for a lifetime of service.
The reward for retirement should be dignity, security and peace of mind.
Government at all levels must, as a matter of priority, formulate and implement policies that will improve the welfare of pensioners and reduce the burden imposed on them by the retirement system. The wellbeing of senior citizens is also an important indicator of the strength and compassion of a nation's economy and social system. Pensioners should not be pushed into poverty at the twilight of their lives.
Preparing Workers for Retirement
While government has a major responsibility, workers themselves must also prepare adequately for retirement. Retirement planning should begin long before the actual date of exit from service.
There are important documents and records that workers are expected to complete, update and verify while still in service. Pension officers and employers should ensure that workers are properly guided through these processes and that their records are updated well ahead of retirement. Completing documentation and data recapture exercises on time can significantly reduce delays in processing retirement benefits.
Unfortunately, some workers fail to regularise their records while in active service. When they eventually retire, discrepancies in their documentation can create unnecessary complications in accessing their benefits through the National Pension Commission (PenCom) and other relevant institutions.
Employers also have a significant responsibility. Reports of employers, particularly in the private sector, failing to deduct and remit pension contributions into workers' Retirement Savings Accounts (RSAs) are deeply concerning. Such failures can leave workers stranded at retirement after years of service.
The Pension Reform Act provides a framework for pension contributions, and employers must comply with their obligations. Workers should also regularly monitor their RSA statements and ensure that their contributions are being properly credited.
Technology has made this process considerably easier. Many Pension Fund Administrators (PFAs) now provide digital platforms through which contributors can access their pension statements using mobile devices. Workers should take advantage of these tools instead of waiting until retirement before discovering problems with their pension records.
Time to End Endless Verification Queues
Another major challenge confronting pensioners is the burden of physical verification exercises.
It is distressing to see elderly citizens spending long hours, and sometimes days, waiting in queues simply to establish that they are alive and entitled to their benefits. In an increasingly digital world, government agencies and pension administrators should move decisively towards more convenient and secure verification systems.
Technology now provides opportunities for biometric authentication, digital identity systems, facial recognition and secure remote verification. Nigeria should explore appropriate versions of these technologies to reduce the physical and emotional burden on senior citizens.
Verification should not become another source of suffering for people who have already given decades of their lives to public and private service.
A properly designed digital verification system could reduce queues, minimise administrative delays, improve transparency and ensure that pensioners receive their entitlements more efficiently.
Pensions Must Reflect Economic Reality
The issue of pension adequacy also deserves urgent attention.
With inflation and the rising cost of food, healthcare, transportation and other essential goods and services, a pension that may have been adequate several years ago can become grossly insufficient today. Pension payments should therefore be subject to periodic review in line with prevailing economic realities.
A static pension in an economy experiencing persistent inflation effectively amounts to a reduction in the purchasing power of the retiree.
Government must therefore consider mechanisms that will ensure that pension adjustments reflect significant changes in the cost of living. Pensioners should not be left to bear the full impact of inflation simply because they have exited active employment.
The Nigeria Union of Pensioners (NUP), among other stakeholders, has repeatedly called for reforms to strengthen the pension system. Such calls deserve serious consideration by the Federal Government, the National Assembly and other relevant authorities.
Balancing Pension Reform With Economic Reality
There is also a need for careful consideration of proposals aimed at increasing employer pension contributions.
The National Pension Commission's proposal to increase employer pension contribution rates during the ongoing review of the Pension Reform Act could strengthen retirement savings and provide greater long-term financial security for workers. It could also deepen domestic capital mobilisation for national development.
However, such a policy must be approached with caution.
An increase in employer contributions could raise the cost of doing business, particularly for Micro, Small and Medium-sized Enterprises (MSMEs), many of which operate on relatively narrow profit margins. If not properly structured, higher employment costs could affect business expansion, recruitment and job creation.
This is why the proposal deserves broad consultation and a constructive round-table discussion involving government, employers, workers, pensioners, PFAs, regulators and other stakeholders.
The objective should be to develop a pension framework that protects workers and retirees without placing unsustainable pressure on businesses or undermining employment opportunities.
Transparency Is Non-Negotiable
Pension funds represent the lifetime contributions of workers. Pension Fund Administrators, employers and regulators must therefore uphold the highest standards of transparency, accountability and professionalism in managing and remitting Retirement Savings Account funds.
Every worker should be able to know how much has been contributed, where the money is held and what benefits can reasonably be expected upon retirement.
Trust is fundamental to the success of any pension system. When workers lose confidence in the system, participation and compliance can suffer.
A strong pension system is not merely a welfare mechanism. It can contribute to economic stability, stimulate local consumption and provide a pool of long-term investment capital for national development.
A National Responsibility
The welfare of pensioners should not be treated as the responsibility of government alone. Employers, pension administrators, workers' unions and individuals all have roles to play.
Government must provide effective policies and oversight. Employers must remit contributions promptly. PFAs must manage pension assets responsibly and transparently. Workers must ensure that their records are accurate and up to date. Regulators must enforce compliance and sanction violations where necessary.
Most importantly, society must recognise the dignity of those who have served.
Today's worker is tomorrow's pensioner. The conditions we create for today's retirees will eventually become the conditions we inherit ourselves.
Nigeria must therefore build a pension system that does more than process payments. It must provide security, dignity and confidence for citizens who have spent the productive years of their lives contributing to the nation.
Retirement should be a period to enjoy the fruits of one's labour, not a season of endless queues, unpaid entitlements, financial anxiety and avoidable hardship.
Those who served Nigeria deserve a retirement worthy of their service.
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