The 2019 budget proposals presented by President Muhammadu Buhari to the National Assembly on Wednesday, December 19th, 2018, has accommodated the interest of pensioners and the elderly in the country in general. This assertion is based on and supported by what the President said at paragraph 57 of his budget speech.
In that paragraph the President simply said this: “We have also provided for the settlement of inherited outstanding pension liabilities.”
The amount of money involved in that provision for the payment of inherited or outstanding pension liabilities is 11 per cent of the recurrent expenditure contained in the 2019 budget proposals.
While giving the breakdown of the 2019 budget proposals as presented to the National Assembly by Mr. President, the Minister of Budget and National Planning, Senator Udoma Udo Udoma said this: “Recurrent (non-debt) spending is expected to rise by 34.17 per cent, from N3.52 trillion in Financial Year 2018 to N4.72 trillion in 2019, reflecting increases in salaries and pensions….”
The specific amount for pension payments as proposed by the President is 11 per cent of the N4. 72 trillion non-debt recurrent spending, which is in the region of N500 billion.
Although a good chunk of the N500 billion may be used for severance payments for public officers of various categories whose tenure will lapse in 2019, it is almost certain that outstanding Retirement Benefits Bond Redemption Fund for Contributory Pension Scheme and pensions under the management of Pension Transitional Arrangement Directorate (PTAD), will be drawn from that pool of money. Retirees under the Contributory Pension Scheme have to wait for about 18 months to start accessing money in their Retirement Savings Accounts because of the delay in converting the theoretical pension redemption bond into cash and crediting it to their RSAs.
The delay in redeeming the bond may not be pleasant to most retirees under the Contributory Pension Scheme, but one important fact is the record of reliability of the Muhammadu Buhari-led administration when it comes to meeting pension obligations to retirees.
The indisputable reliability record is validated by the consistent payments of pensions and entitlements it is making to thousands of Nigerians who have spent decades waiting for such payments without much hope of getting it.
For instance, N54 billion outstanding 33 per cent pension arrears dating back to 2010 when the minimum wage was increased to N18,000 was paid in 2017.
The 3,542 staff of Delta Steel Company who became retirees when it was privatised in 2005 have been placed on the PTAD pension payroll, ending a 13-year wait for their entitlements, which they now receive monthly.
The 9,216 workers of the Nigerian Telecommunications (NITEL) or the next of kin of the deceased among them, who have been waiting to be paid pensions or deceased benefits for more than a decade, are now on PTAD payroll and are being paid regularly.
Another proof of that reliability is the payment of pensions to retired Biafran Police Officers, who were dismissed by the Federal Government in 1971 at the end of the Civil War. They were pardoned by President Olusegun Obasanjo in 2000. President Muhammadu Buhari approved N571.56 million as pensions for the 174 beneficiaries in 2017.
One of the latest examples of paying long overdue pensions is of the privatized Nigeria Airways Limited. President Muhammadu Buhari approved the release of N24 billion in September 2018, being half of their entitlements. It has been paid with a firm promise to pay the balance within six months of 2019.
Members of the National Assembly should pass the budget fast without mutilating or padding it. The material comfort of pensioners and their dependents is tied to the monthly payments of pensions.
Therefore, the National Assembly should treat the provision of over N500 billion in the proposed budget for 2019 with caution. They should not delay, cut or remove it.