1. INTRODUCTION
1.1 The committee was given the following terms of reference to work on
a. To produce a good document justifying the need to increase pension for retirees.
b. To identify supportive legislation that justifies the request for the increase
c. To request an amendment of the existing law, where necessary to accommodate the request
d. To co-opt other members, where necessary, and
e. Any other strategies the Committee may consider appropriate to deliver on its mandate.

1.2 The committee notes that the key element of the terms of reference is increase in pensions of retirees. Hence the committee set its focus primarily on whether there is a need for increase in pensions and how to go about to urge the National Assembly to put into effect necessary legal framework to actualise it.

2. IDENTIFICATION OF TWO DIFFERENT PENSION SCHEMES
2.1 The committee identified two different Pensions Schemes being operated by government as follows.
a. The Non Contributory Pension Scheme referred to as The Defined Benefits Scheme DBS and
b. The Contributory Pension Scheme CPS

2.2. Since these are the two different forms of Pension Schemes on the ground, the Committee looked carefully at each one separately to see where the need for increments can be relevant and how to go about it.

3. NON CONTRIBUTORY PENSION SCHEME (DEFINED BENEFITS SCHEME) DBS
3.1 In the DBS, when an officer retires, his gratuity and pension are calculated on some percentages of his take home pay at the point of retirement, based on the number of years he has served in the service. His pension is paid monthly by government for the rest of his life and his pension is increased periodically as follows.

3,2. Structure Of Pension Increment In The Administration Of The DBS
Provisions for periodic increment of pensions for pensioners are contained in Section 173, subsection 3 of Federal Government of Nigeria Constitution 1999 as amended which states that “Pensions shall be reviewed every five years or together with any Federal Civil Service salary review, whichever is earlier.”

3.3 . By and large, government has regularly increased the pensions of pensioners of the DBS every five years, and whenever there was an increase in the salaries of Federal Civil Servants.

3.4 The latest of such increase was on January, 2024 which was the fifth year after the last increase of pensions on 2019. In January 2024, government increased the pensions of pensioners by 20% for officers who retired on Grade Levels 1 -16 and 28% for those who retired on Grade Level 17.

3.5 Similarly, in July, 2024, when the agitation for minimum wage increase was concluded, government again increased the pensions of pensioners by an addition of N32,000 per month across the board for all pensioners, irrespective of the grade level on which they retired.

3.6 In addition, the Nigeria Labour Congress was able to push through an agreement with the Federal Government to review wage increases every three years, which in effect will translate to reviewing the pension of pensioners every three years instead of five years.

4. ACTION REQUIRED OF THE NATIONAL ASSEMBLY
4.1 From the foregoing, we implore the National Assembly to look into the following.

a. PERIODIC INCREASE OF PENSIONS
To enact a Bill for a three year review of pensions to amend the existing 5 year review provisions of pensions of the 1999 Nigerian Constitution as amended. The 3-year structure agreed for the Minimum wage should not terminate with the Minimum wage issue, but should apply generally for subsequent periodic wage increase structure

b. RATE OF CALCULATION INCREASE IN PENSIONS
As indicated above, 20% to 28% increment was approved for pensioners on DBS in January, 2024. But in July 2024, as a result of increase in Minimum pension, a flat rate of N32,000 across the board was approved, irrespective of grade level on retirement. This flat rate increase to our mind is an inappropriate mode of adjustment of pensions, bearing in mind the wide range of pensions paid monthly for officers who retired on grade level 1 to grade level 17. We implore the National Assembly to put in a bill that will make it mandatory that future pension increase should be calculated on prevailing inflationary rates and effected as incremental percentages spread across different grade levels instead of a flat rate for all grade levels for pensioners on the DBS.

c. Welfare Package
To enact a Bill for the long time agitation of pensioners to be placed under a special provision of the National Health Insurance Scheme for them to enjoy free medical treatment in any Federal Government Hospital in any part of the country as well as appropriate rebate on transportation costs when using federal government transport system

5. RESTORING ANOMALIES IN THE PAYMENT OF PENSIONS BY PTAD
5.1The Harmonisation policy of government with regard to pensions on the DBS provides that pensioners who retire on the same grade level and who serve the same number of years should be paid the same pension, irrespective of the year they retire.

5.2 However, for reasons best known to PTAD, pensioners who retired before 1st October, 2003 are being paid roughly half of what is stipulated in the National Salaries, Income and Wges Commission’s circular letter No. DBS No. SWC/S/04/S.5421/298 of 28th April 2021. attached. The circular letters sets out approved schedule of payment of pension rates for pensioners on the DBS for different grade levels. On the other hand, pensioners who retired after 1st October, 2023 are being paid the rates on the schedule of that circular letter.

5.3 In effect pensioners who retired before 1st October, 2003 are being paid roughly half what their counterparts who retired after that date who were on the same grade level and who served the same number of years in service before they retired

5,4 This discrepancy has been brought to the notice of PTAD several times without any amicable resolution. At one point, we were told that a committee made up of officers of PTAD and National , Salaries, Income and Wages Commission is working on it. We would be happy if the National Assembly can look into this issue and come to the aid of pensioners affected.

5.5 In exercise of the oversight functions of the National Assembly, the National Assembly is urged to look into compliance of PTAD with payment of month pensions to all pensioners in accordance with the directives of National Salaries, Income and Wages Commission, particularly on compliance with the latest guidelines issued by the Commission with its circular No. SWC/S/04/S.5421/298 of 28th April 2021 referred to earlier.

7. THE CONTRIBUTORY PENSION SCHEME
7.1The contributory pension scheme CPS came into effect with the Pension Reform Act of June 2004, which was repealed and re-anacted in July 2014, where both employers and employees contribute a portion of monthly emoluments to an Employee’s Retirement Savings Account (RSA), When an officer retires under the contributory scheme, he meets with his Pension Fund Administrator to work out what he gets as gratuity and monthly pensions for a specified number of years or for life on funds available in his portfolio.

7.2 Basis for periodic pension increase
It has been established, based on the provisions of the section of the Constitution of Nigeria 1999 as amended in Section 173 sub section 3 quoted under the Defined Benefits Scheme that pensioners on the Contributory Pension Scheme are entitled to increase in their pension, every five years or whenever wage increases are made for serving civil servants. The Committee understands that PENCOM has worked out increments due to this set of pensioners from 2004 to date and we also understand that administrative bottlenecks are being addressed to have the arrears paid.

8. ACTION REQUIRED BY THE NATIONAL ASSEMBLY
a. The National Assembly through its oversight function is hereby urged to ensure that all relevant agencies involved in the payments of this pension arrears stipulated in 7.1 above do so speedily

b. Officers who were already in service before the advent of the Contributory scheme are entitled to some gratuity and pension from government for the years they spent before the start of the Contributory scheme. The National Assembly is also implored to play its part in its oversight function to ensure that any amount due as pension and gratuities to such officers are paid to their PFAs

c. WELFARE PACKAGE
As discussed under this heading on the section dealing with pensioners on the DBS, pensioners on the CPS should also be placed under a special provision of the National Health Insurance Scheme for them to enjoy free medical treatment in any Federal Government Hospital in any part of the country, as well as appropriate rebate on transportation costs when using federal government transport system. The National Assembly is urged to put into effect necessary legal frame work to actualise this request

d. The Pension Reform Act of June 2004, which was repealed and re-anacted in July 2014 is now 11 years old. Within that time there have been several major government policy decisions which have affected very drastically the purchasing power of pensioners. They include the introduction of fuel subsidy removal, increase of electricity tariff, collapsing exchange rate into one unit and some other policies all resulting in galloping inflation and astronomical rise of prices of agricultural and food items. There is the need to take another look at the July 2014 act and carry out a review which should include a substantial percentage increase in the contribution of government to the pension portfolio of pensioners.

10 SUMMARY
10.1 We hereby put together for ease of reference a summary of our request to the National Assembly on the general increase of pensions and welfare package for pensioners on the DBS and CPS as follows.

a. PERIODIC INCREASE OF PENSIONS
To enact a Bill for a three year review of pensions to amend the existing 5 year review provisions of pensions of the 1999 Nigerian Constitution as amended.

b. REVIEW OF THE JULY 2014 PENSION REFORM ACT
The Pension Reform Act of June 2004, which was repealed and re-anacted in July 2014 is now 11 years old. Within that time there have been several major government policy decisions which have affected very drastically the purchasing power of pensioners. They include the introduction of fuel subsidy removal, increase of electricity tariff, collapsing exchange rate into one unit and some other policies all resulting in galloping inflation and astronomical rise of prices of agricultural and food items. There is the need to take another look at the July 2014 act and carry out a review which should include a substantial percentage increase in the contribution of government to the pension portfolio of pensioners.

c. ADDRESSING THE ANOMALIES IN PAYMENT OF PENSIONS TO PENSIONERS ON THE DBS
In exercise of the oversight functions of the National Assembly, the National Assembly is urged to look into compliance of PTAD with payment of month pensions to all pensioners on DBS for officers who retired on the same grade level and served the same number of years to earn the same amount of pension in accordance with the directives of National Salaries, Income and Wages Commission, particularly on compliance with the latest guidelines issued by the Commission with its circular No. SWC/S/04/S.5421/298 of 28th April 2021 referred to earlier.

d. RATE OF CALCULATION INCREASE IN PENSIONS
As indicated above, 20% to 28% increment was approved for pensioners on DBS in January, 2024. But in July 2024, as a result of increase in Minimum pension, a flat rate of N32,000 across the board was approved, irrespective of grade level on retirement. This flat rate increase to our mind is an inappropriate mode of adjustment of pensions, bearing in mind the wide range of pensions paid monthly for officers who retired on grade level 1 to grade level 17. We implore the National Assembly to put in a bill that will make it mandatory that future pension increase should be calculated on prevailing inflationary rates and effected as incremental percentages spread across different grade levels instead of a flat rate for all grade levels for pensioners on the DBS.

e. Officers who were already in service before the advent of the Contributory scheme are entitled to some gratuity and pension from government for the years they spent before the start of the Contributory scheme. The National Assembly is also implored to play its part in its oversight function to ensure that any amount due as pension and gratuities to such officers are paid to their PFAs

f. Welfare Package
To enact a Bill for the long time agitation of pensioners to be placed under a special provision of the National Health Insurance Scheme for them to enjoy free medical treatment in any Federal Government Hospital in any part of the country, as well as appropriate rebate on transportation costs when using federal government transport system.

10. CAUTION
10.1 The committee is aware that our Association, the NARED-FME is only a very small group in the generality of thousands of pensioners on the DCS and CPS for which we need some form of authorisation to speak for them at the National Assembly. Similarly, there are very strong National Pension Unions like the NUP, the CPSU and the Association of Retired Directors of the Federal Civil Service which are also engaged in one form or the other in the agitation to secure due rights of pensioners.

10.2 The Committee is also aware that there are also some issues before the Courts on some of these issues.

10.3 The committee feels that it is therefore necessary for our Association to liaise with these groups BEFORE taking any issue directly to the National Assembly. This will ensure that these National Pension Unions are not only aware of what we are trying to achieve, but also given a chance to agree or disagree with our views and can add their voice to our call on whatever comes out at the end of the day to be taken to the National Assembly for action.

11. GENERAL REMARKS
11.1 In the course of our work, we identified some issues not directly related to the terms of reference of the committee which may require in future a separate memo to government. The issues include the following.

a, Regular Pension Policy Review to meet new developments in major government policies that affect the generality of the purchasing power of pensioners

b. Governance & Transparency: Enhancing pension fund governance with clear accountability and communication to build public trust, sustain pension improvements to protect retirees from negative effects of economic downturns

c. Prioritise safe and low-risk management of pension funds that offer stable returns and act as buffers against global economic instability.

d. Shock Mitigation: Develop economic buffers to protect pensioners from currency volatility and global disruptions

e. Involving pensioners in policy decision exercises that involve pension administration and management.

12. APPRECIATION
12.1 The Committee thanks our President for giving us this assignment which by the terms of our reference we are expected to complete in roughly one week! We have worked very hard within that short time line. We hope the Association will find something useful from this report rendered,

12.2 It has been a wonderful experience working with these wonderful members of the committee who have shown unparalleled passion and zeal to offer invaluable advice and to give out their best to enhance the welfare and take home pay of pensioners. Once again thank you and God bless

PENSION REFORM COMMITTEE
i. Mr. Samuel Agun – Chairman
ii. Mrs Fatima Jiddum Ahmad
iii. Otumba Olapeju O. O.
iv. Mrs Ori Okojokwo
v. Mr. Danjuma Ali
vi. Mr. Abiodun Fabiyi
vii. Dr. Flora Aderogba