Heaven can wait! Bitter reality of Nigeria’s pension trap

• Starvation, death, grip elderly retirees amid economic hardship
• Broken promises, bureaucratic neglect leave pensioners in despair
• The Silent Thieves of Twilight:Arithmetic of Nigeria’s Pension Fraud

By Olatunji OLOLADE, Associate Editor

Pensioner taking first aid in Osun, after he slumped during screening exercise at the state’s pensions office.

Sunday Oboite hit the floor with a hard thud, his clatter reverberating through the large hall—a threnody for those who still clung to life, while dying to receive their pension.

At 1:20 pm, Oboite fell, not the thump of flesh on cold concrete, but the crash of hope shattering on the granite of a broken vow.

The 75-year-old had been waiting, silently, with hundreds of fellow retirees who had gathered in the dimly-lit hall of the Oredo Local Council Secretariat in Benin City, Edo State, to receive their meagre pensions after a ten-month delay.

But as the sun arched high over the Secretariat, Oboite slumped forward, his body no longer able to bear the burden of waiting.

His fellow retirees scrambled—some to help, others fleeing, as if falling was contagious.

At precisely 1:38 pm, doctors would confirm what every pensioner in that hall already knew: Oboite was dead, not from a stroke, nor from an unforeseen illness, but from starvation—starved of sustenance, of both food and dignity.

His death arrived as a brutal punctuation to the long, agonising sentence that was his final years, triggering a question that pierced the heart of Nigeria’s moral fibre: “Must the government starve its elderly to death?”

Oboite had served the government for decades, working in the Works Department of the Oredo Local Council. Like many of his colleagues, he had believed in the promise that at the end of his service, his twilight years would be spent in peace, supported by the pension he had earned. Instead, he found himself trapped in a cruel purgatory, waiting in vain for months, as hunger gnawed at his insides. The pension arrears, which had become his lifeline, dangled just out of reach, a cruel tease that would eventually cost him his life.

Late Sunday Oboite, 75, collapsed and died during a screening exercise for pensioners at the Oredo local council in Edo.

The morning of his death, Oboite had arrived at the secretariat at 8 am, hoping to be screened and finally paid his dues. But bureaucracy, as always, was the slowest-moving beast. After hours of waiting, pensioners were directed to a hall a hundred meters away. Oboite, too weak to walk any further, had chosen to wait behind, his body betraying him in its exhaustion. By 1:20 pm, he had collapsed. By 1:38 pm, the doctor’s cold pronouncement: Dead.

“It was hunger that killed him,” John Eweka, a fellow retiree, whispered bitterly, his voice cracking like old leather in the heat. “Many of us can no longer afford to eat. We begged for what is ours, and they denied us even that.”

Four hundred and fifty four days later, Oboite’s body still laid cold in the morgue, abandoned like the promises of the government that failed him. His family could not afford the burial costs, and his colleagues, equally impoverished, could do nothing to help. Even the eventual promise of financial support from the Edo State Governor Godwin Obaseki felt hollow, a posthumous mockery for a man who had died of neglect.

A History Written in Blood and Tears

Before Oboite, there was Olusa Ayodele, an 80-year-old man who collapsed under the weight of government indifference. Ayodele had retired from the Federal Ministry of Agriculture, only to face a fate worse than the toils of his youth. On October 10, 2011, Ayodele traveled a painful journey of hours from his village of Akunnu-Akoko to Akure, where he was due to undergo yet another “verification” for pension arrears that had long been owed. Fevered and weak, Ayodele arrived at the verification centre only to vomit twice—a grim harbinger of the end. His son, Deji, cried for help, but none came.

Like Oboite, Ayodele died waiting, his body abandoned on the bare floor for hours as his fellow retirees quietly maintained their spots on the queue, heartbroken yet hard-pressed to complete their screening.

Ayodele’s death, like Oboite’s, was a slow, bureaucratic “murder” executed in the guise of “verification” and administrative delays.

Nigeria’s retired workforce, now shadows of their former selves, suffer these in the twilight of their existence. The reality is, however, darker than any statistic could capture, with over one million retirees left stranded, awaiting pensions that may never come.

Some retirees protesting at the African Alliance Plc Lagos office over its failure to remit their pensions.

The Curse of African Alliance

Many retirees are forced to endure a life of misery and starvation as imposed by systemic and administrative failures. One of the most egregious examples of the system’s failures can be found in the recent collapse of the African Alliance Insurance Plc. Pensioners, who trusted the company with their life savings, now find themselves destitute as the company falters under the weight of insolvency.

For months, retirees flocked to African Alliance offices, hoping for a glimmer of hope. Instead, they found the doors locked, the offices deserted, and their pensions vanished into the ether. “We have been abandoned,” lamented Monsurat Idris, a retired teacher from Dopemu, Lagos. Like so many others, she had switched to an annuity plan, promised “salary for life,” only to watch helplessly as her entitlements dwindled into nothingness.

Idris recalled how African Alliance’s representatives persuaded her and fellow retirees to dump the programmed withdrawal plan recommended by the state government for the firm’s annuity plan. They even encouraged several retirees to borrow money while waiting for their entitlements. When those entitlements finally arrived, most of it vanished into debt repayment, leaving retirees even poorer than before. The once-thriving insurance firm now stands as a monument to failure, with its top executives deserting their posts while pensioners weep over unpaid claims.

Musiliu Ganiu, a retired teacher from Lagos, while reliving his nightmare with the insurer, disclosed that since March, many retirees haven’t received a dime from the firm. He lamented that African Alliance promised him and his colleagues lifelong payments. But the insurer is now in distress, having shut down its headquarters, its promises dissolving into thin air.

In August 2023, pensioners in Lagos State, under the Contributory Pension Scheme (CPS), made a desperate appeal to Governor Babajide Sanwo-Olu, to come to their aid. In a letter dated August 20, 2023, the Nigerian Union of Pensioners (NUP), Lagos State Chapter, lamented their unpaid pensions dating back to 2007, leaving retirees impoverished.

Stripped of gratuities and forced to subsist on meagre payments, many like a former Director on grade level 17, now receive only N70,000 monthly, while lower-level workers earn as little as N12,000—or none at all in the case of those on grade levels 1 to 4.

“We receive an average of ten notifications of death of our members on a monthly basis,” the union wrote, underscoring the severity of the situation. They attribute these deaths to the economic hardship faced by retirees, who are unable to keep up with rising living costs, especially in light of the recent fuel subsidy removal.

The letter, signed by the NUP’s Chairman, Omisande Michael and General Secretary, Olagbaye Johnson, included a plea for immediate action, including the urgent payment of outstanding pensions dating back to 2020, a review of the pension payment system, and the reinstatement of gratuity for all categories of workers under the CPS.

Subsequently, the Lagos State Governor, Babajide Sanwo-Olu, in a tweet on February 11, 2024, announced that Lagos would begin payment of N3.1 billion to over 1,000 pensioners under the Contributory Pension Scheme (CPS).

Abebi Adebola, a retired school administrator and Headteacher in Lagos said that, so far, Lagos State has performed most commendably among the 36 states of the federation, in the way it treats its pensioners. Save for some occasional hiccups, retirees receive their money at due time.

According to her, some of her colleagues who retired in 2012 were luckier as they received 50 per cent initial lump payment of their entitlement in 2013, one year after their retirement. However, retirees like Adebola, who retired in 2015, had to wait for a gruelling 46 months before they received their gratuity. When they did, they were paid a paltry 25 percent of their entitlement.

The scale of the tragedy stretches far beyond individual stories. In Kwara State, over a million pensioners, precisely 1,126,000 retirees died between January 2015 and February 2017, according to the state chapter of the National Union of Pensioners (NUP) – a staggering toll that reflects the sheer depth of the crisis.

The life of a Nigerian pensioner is indeed, one bitter struggle, where survival hinges on a meager stipend of N500, N10,560, N25,000, or at best, N70,000 per month. Even this paltry amount arrives unpredictably. “The pension offers little succor,” laments Florence Alogba, 62. “It is never enough, especially with the rising cost of food.” The delay in payment compounds the hardship. “By the time the stipend comes,” said Foluso Okin, a retired principal, “it goes toward debts—medical bills, school fees, loans. We never enjoy it. They said a teacher’s reward is in heaven. But I want my reward on this earth.”

For some, the burden of an unemployed family adds to the weight. Idowu Ojo, a retired teacher, recounted the anguish of his unemployed sons: “My daughter’s husband works, but the whole family depends on her. We try not to be a burden, but the government’s failure forces our hand.”

Beyond the unpaid pensions, retirees face another torment: corruption. In southwestern Nigeria, retired teachers must bribe pension staff to process their files. “We pay N50,000 just to have our files treated,” revealed a retired primary school teacher, pleading anonymity.

Worse still is the Ebonyi State scandal, where extortionists in the audit department reportedly demanded money to process the files of retirees. One of the retirees who was not pleased with the new arrangement, Benedict Anyigor, said that he had already paid N50,000 but his file was withheld by the accused officials of the State’s Audit Department.

“I was supposed to be paid N4,787,081. Out of this amount, government has paid me N800,000 but one of the officials in the state audit and his colleague who have been processing my file for payment, said I should settle them with 200,000 out of this amount for immediate payment or my file will not be sent to the Head of Service for the payment.

“I have already given them N50,000 out of the N200,000. I told them that I will pay the remaining N150, 000 after receiving full payment of the gratuity from the government which they have started paying. But he increased the amount of settlement to N500,000 and insisted that I must pay him the amount before he releases my file to the Head of Service for the payment and I don’t have the amount. I retired as a Level 8, Step 15 officer at the General Hospital, Onueke in Ezza South Local Government Area of the state,” he said.

Reacting to the allegations, the state’s Auditor General at the period, Innocent Nweda, vowed to dismiss the culprits. He promised to investigate the alleged scandal stressing that in 2012, about four principal members of staff of the Audit were dismissed for a similar crime.

A larger gale of corruption sweeps through the pensions office of the Federal Civil Service. Nigerians won’t forget in a hurry, the scandalous case of Abdulrasheed Maina, the former Director of the Customs, Immigration, and Prisons Pensions Office (CIPPO) and Chairman of the Pension Reform Task Team (PRTT). In 2013, Maina fled the country after being implicated in a N2.1 billion pension fraud by the EFCC. Despite public outrage, he was secretly reinstated and promoted under former President Muhammadu Buhari’s administration, only to flee again to avoid prosecution.

Maina was eventually sentenced to eight years in prison after a two-year trial. Justice Okon Abang criticised the United Bank of Africa (UBA) and Fidelity Bank, accusing them of being “conduits” for the fraud and suggesting they should have been charged. The court found that Maina used fake accounts, with the help of relatives in the banking sector, to siphon funds from pensioners, many of whom died in poverty.

Justice Abang condemned Maina’s lavish lifestyle, noting he lived in luxury abroad, while pensioners suffered. He emphasised that Maina’s salary of just over N300,000 could never have amounted to the N2 billion he stole, calling the case a reflection of the moral decay in society. The judge urged for national reform and stronger action against dishonesty.

And still, the system remains unchanged. The National Pension Commission (NPC), created to oversee the Contributory Pension Scheme (CPS), has failed to enforce its own regulations. Many states have not even adopted the CPS, instead continuing under the archaic Defined Benefits Scheme (DBS), where pensions are either delayed or denied outright.

The promises of reform—like those made by African Alliance—ring hollow in the ears of retirees. NAICOM, the industry regulator, has issued ultimatums, demanding that pension fund administrators clear their debts and settle arrears, but the threats go unenforced. Instead, retirees are left to live—or die—without the money they were guaranteed.

It is a nationwide plague, a systemic failure that leaves millions of retirees in the grip of hunger, illness, and despair. The Contributory Pension Scheme (CPS), introduced in 2004 and amended in 2014, was supposed to bring transparency and security to the retirement process. Yet, 20 years later, the reality has fallen far short of that promise.

Some members of the Nigerian Union of Pensioners during a protest over non-remittance of their pension in Lagos.

The Arithmetic of Pension Fraud in Nigeria

The arithmetic of pension fraud in Nigeria unfolds like a tragic tale of exploitation, where Pension Fund Administrators (PFAs) weave intricate schemes to rob pensioners of their hard-earned savings. These institutions, entrusted with securing the future of retirees, instead cloak their actions in secrecy, siphoning wealth from the vulnerable. To unravel the mechanisms by which they prey upon the unsuspecting – hidden behind veils of fees, mismanagement, and outright theft – is to embark on a jarring journey into the bowels of an arithmetical con.

Beneath the surface of every pensioner’s account lies an unseen hand, quietly taking its due, argued Khadijah Ilemobaye, an Actuarian scientist cum insurance auditor. Explaining further, she said, a pensioner, with ₦10 million in savings, unknowingly surrenders 1.5% of that sum each year—₦150,000 in annual fees that slip through the cracks of undisclosed charges. Over a decade, this amounts to ₦1.5 million, silently drained without the pensioner’s knowledge, a slow bleed of their future security.

The PFAs, like the proverbial masters of illusion, invest pensioners’ funds in low-yield government securities. While these investments generate meager returns, the PFAs impose high management fees, further eroding the value of these already modest gains. Imagine a pension fund of ₦5 million, invested in a bond yielding a mere 6%. The pensioner earns ₦300,000 per year, yet the PFA takes 2%—₦100,000—as its fee. The pensioner is left with only ₦200,000, believing the returns are better than they are, while the true cost is hidden beneath layers of financial jargon and opaque reports.

In the dark recesses of the system, corrupt officials conjure “ghost pensioners” into existence. These phantom figures, fictitious names on payrolls, are used to divert vast sums of money. A PFA managing 100,000 real pensioners might fabricate 10,000 ghost pensioners, each assigned ₦500,000 in fraudulent pensions. In this spectral arithmetic, ₦5 billion vanishes, spirited away into the coffers of those who feed on the trust of the system, leaving the pension fund diminished by this insidious scam.

Time, in the hands of the PFAs, often becomes a weapon of control as payments due to pensioners are deliberately delayed, extending the period during which the PFA controls the funds. A pensioner awaiting ₦5 million may face a delay of six months, during which the PFA earns an 8% annual interest. In this short span, the PFA collects ₦200,000 in interest, profiting from the pensioner’s enforced patience. This delay not only disrupts lives but compounds the injustice by allowing the PFA to gain from withholding what rightfully belongs to another.

With monthly contributions flowing steadily, some PFAs quietly divert portions into their own pockets. A pensioner contributing ₦50,000 each month may find that ₦10,000 is secretly rerouted to fraudulent accounts. Over 10 years—120 months—this diversion amounts to ₦1.2 million stolen from a single pensioner. With 10,000 pensioners in their grasp, the PFAs can embezzle a staggering ₦12 billion, a grand theft concealed in the monotony of monthly deductions.

For some pensioners, the final blow comes at the moment of retirement. The gratuity, the lump sum meant to provide for their twilight years, is intercepted. A group of retirees expecting ₦1 billion in gratuities may find only half paid out, as corrupt officials siphon away ₦500 million. The pensioners, left with half their entitlement, face a future diminished by the greed of those entrusted with their care.

For one pensioner, the toll of these fraudulent practices is devastating. Over a decade, they lose: ₦1.5 million in hidden administrative fees, ₦1 million in excessive investment charges, ₦1.2 million siphoned from their contributions, ₦200,000 lost to delayed payments. In total, ₦3.9 million is stolen from a single pensioner over 10 years. Multiply this across thousands, and the scale of the fraud balloons into billions of naira—an unfathomable betrayal of trust.

Some pensioners protesting over their unpaid entitlements in Lagos.

Nigeria’s Pensions Animal Farm: Four legs good, two legs bad

Like the tidal waves that slowly erode the shore, Nigeria’s pension crisis has been silently consuming its elderly for decades. The promises that once gleamed like golden dreams have become rusted, hollowed out by legal loopholes, hidden charges, and predatory practices. Nowhere is this betrayal more stark than in the government’s imposition of a shocking 25% cap on initial withdrawals, a cruel twist that leaves retirees with only a quarter of the savings they’ve painstakingly accumulated over decades.

The full promises of a dignified retirement dissolve like fog at dawn, leaving only a fraction of the anticipated savings for the elderly to live on. Imagine spending decades working, contributing to a pension fund, believing in the promise of security, only to discover that when the moment comes to access your savings, you are handed a mere quarter of what you are owed. The remaining 75%? Locked away, dripped out in agonisingly small sums over the years.

Introduced under the guise of ensuring long-term financial stability, the 25% cap has instead become a death sentence for retirees. While pensioners who spent about 35 years in the service of their country wallow in abject poverty occasioned by their inability to access their benefits, former governors and deputies—who served for a mere four or eight years—are ushered into retirement with lavish gifts, the likes of which would make kings envious.

Until recently, Lagos State stood as a stark example of this paradox. Enshrined in the Public Office Holder (Payment of Pension) Law No 11, within the official Gazette of 2007, lies a provision that guarantees a governor, upon leaving office, a lifetime pension equal to the full salary of the sitting governor—that is, N7.7 million annually. The former governor is also granted free healthcare for himself and his family, six brand-new cars every three years, and an array of allowances fit for royalty: 300% of the annual salary for furniture (N23.3m), 10% for house maintenance (N778,296), 20% for utilities (N1.5m), and 30% for car upkeep (N2.3m).

But the largesse doesn’t end there. A former governor enjoys the luxury of an entertainment allowance (N778,296) and a personal assistant earning a quarter of the governor’s own salary (N1.9m). Domestic workers—a cook, a steward, a gardener, and more—are placed at their service, with their positions even made pensionable. For security, eight policemen and two state security officers stand sentinel for life.

In the wake of protracted outrage over the bumper package, however, the Lagos State House of Assembly, in 2022, amended the state Pension Law for former governors and other political office holders, reducing their benefits and emoluments by 50 per cent. The House expunged the provision of houses in Abuja and Lagos for former governors, Sequel to the presentation of a report by the House Committee on Establishment, Training and Pension.

It further recommended a reduction in the number of vehicles to be made available to former governors and their deputies as the House Speaker, Mudashiru Obasa, suggested that the former governors should get two vehicles (a car and a van) instead of the three recommended by the committee, and advised that the cars be changed every four years instead of the three years previously recommended by the report.

Elsewhere, Delta State offers its ex-governors a fully furnished duplex in any state of their choosing, and also full medical care for their families, two vehicles (including a utility car) every two years, and a protective entourage of armed officers. Fifteen days of annual vacation in any part of the world are but another pearl on this string of luxurious benefits. Meanwhile, in Kano, the former leaders are gifted with a six-bedroom mansion and healthcare for life, while Ekiti provides its retired governors with a plush five-bedroom duplex, two cars, a pilot vehicle to be replaced every three years, and 300% of the annual salary for furniture.

In Rivers State, Celestine Omehia, whose governorship was nullified by the Supreme Court, still walked away with a princely sum of N695 million in entitlements.

Across at least 22 states, from Oyo to Zamfara, Kwara to Rivers, similar stories echo: ex-governors and their deputies luxuriate in the fruits of their brief tenures, their coffers brimming with the spoils of jumbo pensions, while civil servants who toiled for decades in the nation’s service languish, unpaid and forgotten.

At the federal level, the story turns no less extravagant. In the 2023 budget, a staggering N13 billion was earmarked for the pensions of former Presidents, Vice-Presidents, Heads of State, retired chiefs of service, permanent secretaries, and heads of agencies. There is no record, none at all, of any of the recipients lamenting unpaid pensions, no whisper of delay in their vast entitlements.

Meanwhile, the retired civil servants, who dedicated 35 years of their lives to the nation, wait in vain for their dues. Against the backdrop of the malady, the scales of justice occasionally tilted on the side of truth. In 2019, the Federal High Court in Lagos, under the gavel of Justice Oluremi Oguntoyinbo, declared these life pensions for ex-governors and deputies illegal, immoral even. The Attorney General was ordered to take swift legal action to abolish these laws and recover the ill-gotten funds.

Previously, in the Socio-Economic Rights and Accountability Project (SERAP) v Attorney-General of the Federation, (Suit No. FHC/L/CS/1497/2017 and Alhaji Garba Umar v Taraba State Government (Suit No: NICN/JOS/26/2016, the Federal High Court and the National Industrial Court declared as null and void the payment of pension and gratuity to former governors and deputy governors.

Senators Gbenga Daniel and Ibrahim Dankwambo, both former governors, have also directed the governments of their respective  states, Ogun and Gombe respectively, to stop paying them a governor’s pension since they are currently receiving salaries and allowances in the National Assembly just as the governments of Kwara, Imo and Zamfara States have abolished the payment of the controversial pensions to their former governors and their deputies.

“We call on other state governments to abolish the pension as soon as possible. Nigeria can no longer afford to pay scandalous pension to ex-governors while workers are owed arrears of meagre pensions,” said Senior Advocate of Nigeria, Femi Falana (SAN).

However the payment of the lavish pensions for ex-governors and deputies continue unabated.

Retirees in Bayelsa march on the streets to protest their unpaid entitlements.

Navigating the Trap

On September 17, 2024, the National Pension Commission (PenCom) announced that total pension assets have reached N20.79 trillion. However, only seven states—Lagos, Kaduna, Delta, Ekiti, Osun, Edo, and Jigawa—and the Federal Capital Territory (FCT) have fully implemented the Contributory Pension Scheme (CPS).

PenCom’s Acting Director General, Omolola Oloworararan, highlighted the steady growth of pension funds, noting that states had remitted over N236.7 billion between January 2020 and mid-2024. She emphasized the benefits of adopting the CPS, such as access to pension funds for infrastructure projects through state bonds. Lagos, Niger, Osun, Ekiti, and Delta have successfully issued state bonds backed by pension funds, with projects like the Lekki-Ikoyi Bridge in Lagos benefiting from this funding.

PenCom, she said, is focused on engaging 26 states with CPS or CDBS laws that have yet to begin implementation, aiming to ensure that all retirees receive timely benefits. The commission is also working to resolve accrued rights payments and ensure pension increments in line with the Nigerian Constitution, stated Oloworararan.

Regardless of her sunny assurances, Oloworararan may find it difficult convincing millions of pensioners caught in a maelstrom of unpaid benefits and neglect.

A higher proportion (70%) of the retired, aged, and ageing population in Nigeria earns N50,000 per month or less or nothing, according to a study sample by Dataphyte and JAIRAA. At this income level, the retired, aged, and ageing (RAAs) live below the global poverty line. According to the World Bank, the poverty line is estimated at $2.15 or N3,190 per day (at N1,484 per dollar).

For those nearing retirement, the lesson is clear: vigilance is the only armour. Nigerians must demand transparency from pension fund administrators, refusing to be lured by the false promises of higher returns, advised Usman Shoyode, an insurance auditor and financial risk analyst. To PFAs, he suggested that retirement savings must be diversified and spread more transparently across multiple funds to mitigate the risk of loss.

Above all, the 25% cap must be challenged, both in the law courts and in the hearts of the people, who must demand that their government provide the full measure of what they are owed.

It is also very essential to research and choose pension fund administrators (PFAs) carefully. Avoid companies with a history of delayed payments or unresolved claims, and opt for those with a proven track record of stability. Furthermore, retirees may consider diversifying their retirement investments. Relying solely on the pension system can be a recipe for disaster, as the stories above illustrate. Personal savings, real estate investments, or even small-scale business ventures can provide additional security in a country where government promises are often as fragile as the lives they are meant to protect.

As the sun sets on the lives of those who once carried Nigeria on their shoulders, it becomes ever more urgent for the nation to confront the grim reality of its pension system. Because for every Ayodele who falls, and for every Oboite whose heart gives out, the very soul of the nation weakens. It was on a sunless day that they both fell, into the abyss of a failed promise. Their last breaths churning against the silence of those who watched their struggle and did nothing. The aged civil servants, who once who tilled the earth and built roads for the living, got railroaded, destitute and disenchanted, into an early grave.