Pension matters and the finance ministry

The move may be a response to the rampant cases of fraud involving officers responsible for administering pension fund for federal civil servants that are not part of a new scheme that came into effect in 2004. It could also indicate the government’s concern regarding the frequent theft of pension funds that have occurred in […]

The move may be a response to the rampant cases of fraud involving officers responsible for administering pension fund for federal civil servants that are not part of a new scheme that came into effect in 2004. It could also indicate the government’s concern regarding the frequent theft of pension funds that have occurred in recent times. Some federal civil servants are currently on trial in the courts over cases of embezzlement of pension funds.  
But good as the concern may be, of what practical value would the movement of pension matters to the finance ministry?
What will change in effect to make pension administration transparent? Merely moving pension matters from one public office to another without addressing the root cause of what makes pension funds targets of fraudulent administration will not bring any real change. It may be worse, because the new policy does not make room for the principles of checks and balances to operate effectively.
 In an environment where accountability, transparency and integrity have been in high deficit recently, it is not very wise to vest the power to implement, even if temporarily, a scheme with such high volume of money in the same authority or agency whose duty is to monitor or audit public funds.
It does not need stating that such a setting will lead to a serious conflict of interest. There will be enormous room for collusion and compromise that will again short-change the civil servants who have for ages suffered in the hands of thieving public officers who seem to have sold their conscience to the Devil for personal aggrandizement.
It is possible that because pension matters have all this while been handled from another office, is the reason it has been easy to detect cases of fraud and embezzlement and enable the prosecution of those who perpetrate them. Now that the bureaucratic machinery for administrating the funds will be domiciled in the same Ministry of Finance that is supposed to act as an independent oversight agency, it raises legitimate fears that there might be too much room for slackening of this oversight.
Moving expenditure to an auditor will worsen rather than improve transparency and accountability issues. If the decision flowed from some self-righteous position that because the finance ministry has technocrats with forensic auditing skills to handle complex pension fund frauds, the pension funds unit is not where to begin, because it does not necessarily follow. The trouble that has dogged pension administration over the years is the perception of it as being some kind of slush funds meant for easy picking to prosecute projects that are political in nature and do not address the core issue of pensioners. It has been known that such funds have been used in the past to pay for political campaigns; as the 2015 elections approach and the government intervening now, the perception that this is indeed the case this time around has only grown stronger. The Minister of Finance must dispel such perceptions.
Since the Pension Act of 2004 which created the Pension Commission (PENCOM), funds accruing to the contributory scheme have been administered with apparent success and with only minor infractions. This means structures can be erected to efficiently run pension schemes without the heavy-handed bureaucracy that often end up making a mess of them. This new policy runs the risk of being one of them.