The 27 local governments in Jigawa State have failed to remit at least 3.2 billion naira in statutory pension deductions and contributions for several years, Newslodge has learned.
Official documents obtained exclusively by this newspaper revealed that the municipalities did not remit the corresponding pension quotas in 2014, 2015, 2019, 2020 and 2021.
The documents also suggest that the councils’ failure to remit funds as required by law has left the state contributory pension plan in disrepair.
The document, a transition committee report, lists the outstanding payments of the 27 local government councils as contributions of 17 per cent from September 2014 to May 2015, amounting to 1.25 billion naira.
Similarly, in 2019, unremitted funds amounted to 254.6 million naira; 795 million naira in 2020 and 920.9 million naira in 2021; for a total of more than 3.2 billion naira.
What the state pension law says
Article 4 of the Jigawa Contributory Pension Plan (State and Local Government) Act requires each pensionable worker to contribute eight percent of his or her basic salary; while state and local governments will contribute 17 percent of the base salary of all affected personnel on their payroll.
Retired workers would be entitled to enjoy their retirement benefits from the fund when they have contributed for at least five years. Those who contributed for less than five years would receive a refund of their eight percent contributions plus interest earned.
The plan began with state employees on February 1, 2001, and the plan’s expiration date was February 1, 2006.
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Staff from local government councils and local government education authorities joined the scheme in November 2004, and the judiciary (High Court, Sharia Court and Judicial Service Commission) joined the scheme in January 2006.
Distressed Pension Plan
From its inception, the pension scheme was administered solely by HNB Trustees Limited, later known as PHB Capital and Trust Limited.
However, in accordance with the provision of the Pension Reform Act of 2004 that all pension funds must be managed by Pension Fund Administrators (PFAs) licensed by PENCOM, the board of directors of the Jigawa pension plan approved six pension administrators –Veritas Glavills Pension Limited–. manage 20 percent of the assets; Fidelity Pension Limited, 16 percent; Trustfund Vaughn Pensions Limited, 16 percent; Leadway Pension Limited, 16 percent; Access Pension Managers, 16 percent and Oak Pension, 16 percent.
From 2015 to February this year, official documents revealed that a total of 35.1 billion naira was raised in contributions of eight percent and 17 percent. However, during the same period under review, a total of 49.6 billion naira was also paid to 13,225 pensioners from the state, local government councils and local education authorities.
Gross asset earnings from May 2015 to March 2023 were Naira 18.7 billion and the funds’ total assets in March were Naira 10.8 billion.
Since the government pays pensioners more than the contributions remitted, the officials who asked not to be named say the situation could lead to non-payment of pensioner contributions unless the full funds owed are remitted.
Most local governments in Jigawa, like their counterparts in many parts of Nigeria, depend on statutory federal allocations to survive. However, most states operate joint state and local government accounts that allow state governors to determine the amount sent to each local government. Therefore, many local governments are underfunded and barely have enough to pay salaries.
Newslodge could not determine whether the Jigawa local governments obtained all the legal allowances that would have allowed them to make the pension contributions due.
When this newspaper contacted the state commissioner for local government affairs, Ahmad Garba, to inform him of the situation, he did not respond to phone calls or messages sent to him. He, too, was not in his office when our reporter visited, and the officials there refused to speak on his behalf.
Similarly, the president of the Association of Local Governments of Nigeria (ALGON), Jigawa chapter, Bala Chamo, was not in office when our reporter visited him on Monday, Tuesday and Wednesday. He also did not return phone calls or text messages.
In addition, the president of the Jigawa State Pensioners Union, Umar Sani, declined to comment when contacted by our reporter.
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