In defence of the NSITF
By Sani Abdulahi
IN its editorial of July 16, 2004 entitled "Repositioning the NSITF", The Guardian curiously misplaced the facts in its assessment of the Fund while making disparaging remarks about its management. As for the unduly harsh judgment of the newspaper on the Nigeria Social Insurance Trust Fund (NSITF) and its management, we are supremely relieved that such an untenable judgment is very much at variance with the majority view of the members of the Fund. However, we have the responsibility to correct factual errors embodied in the editorial for the purpose of public enlightenment.
First, the editorial said "...But we hasten to add that Nigerians demand as of right that henceforth, in place of unattested self-promoting decennial statement, there should be duly audited annual report." This is a surprising statement from a newspaper. The truth is that annual audited accounts of NSITF have been published in the THISDAY, Champion and Daily Trust newspapers on the 15th, 17th and 19th of May 2004. respectively. Secondly, the editorial sees the release of the Fund's score card "as an effort to wrench legislative support for the organisation's desire to not only avert being scrapped but also secure a place as one of the Pension Fund Administrators." Again nothing can be father from the truth. The supplement, announcing the Fund's score card as part of its 10th year Anniversary celebration, was first published in newspapers on July 1, 2004 while the Pension Bill had been signed into law on June 25, 2004.
The law has, of course, widened the scope of operations of NSITF. So, how could the Fund still be struggling "to avert being scrapped" six days after the law had come into effect with a clear definition of NSITF in the new scheme of things Even The Guardian itself published the supplement later on July 5, 2004, 11 days after the law had been made ! By the way, when has it become a crime in a democracy for any group to make arguments before lawmakers in respect of a law being made Thirdly, the editorial made some suggestions for repositioning the Fund so that "it can assume and make a success of the additional responsibilities of providing social security to all Nigerians as envisaged by the contributory pension Act." The simple fact of the matter is that the Act's provision of social security is for contributing citizens only and not for "all Nigerians". The Pension Act is for a contributory scheme and not a comprehensive social security as we may wish.
Fourthly, the editorial's comparison of former National Provident Fund (NPF) and NSITF is not quite tidy as the two schemes are not the same. For the avoidance of doubts, the NPF was a defined contribution scheme, i.e. a savings scheme that provide for lump sum payments of what was contributed plus a fixed interest as benefit, while the NSITF is a defined benefit type that pays monthly pensions and grants (gratuity) as benefits.
It is interesting to note that during the period 1962 to June, 1994 (NPF era), a total of 20,410 employers were registered into the scheme whilst a total of 20,449 employers were registered into the NSITF scheme from July 1994 to March 2004. Employer registration increased by 100.19 per cent from July 1994 to March 2004 and the average annual registration of employers was 618 and 2,004 in the NPF and NSITF respectively. This was contrary to the average employer registration of 160 and 69 in the NPF and the NSITF respectively as contained in your editorial.
In the area of employee registration, a total of 2,839,153 employees were registered under the NPF era of 33 years whilst a total of 1,412,217 have been registered under the NSITF era of only 10 years. This brings the total employees registered in the scheme to 4,251,370. Employee registration in the NSITF increased by 49.74 per cent whilst the average annual registration was 86,034 and 141,221 in the NPF and NSITF periods respectively. These feats in compliance activities were attained notwithstanding the prevailing harsh economic climate since the inception of the NSITF. It could be recalled that there was massive registration of employers and employees at the inception of the NPF scheme in 1962 and as such many large employers and multinationals were registered at that time. Furthermore, employment opportunities were more in the era of NPF than in the NSITF. The period July 1994 to March 2004 was characterised by economic recession and under-capacity utilisation that resulted in mass retrenchment of workers.
Fifthly, the editorial's failure to see anything cheery in benefit administration under NSITF where claimants (largely from organisation where the National Minimum wage does not apply) are paid a monthly minimum of N4,400 or 80 per cent of the National Minimum Wage is rather unfortunate. The fact is that the improved benefit has been a source of great relief to thousands of our claimants as evidenced in their testimonies nationwide. Recently, on the Radiolink programme of the Federal Radio Corporation of Nigeria (FRCN), some of the members of the Fund phoned in from all parts of Nigeria acknowledging this fact while making useful suggestions on how to improve on performance. And where else do employees that do not enjoy National Minimum Wage congregate other than the small and medium-sized firms the editorial claimed had apparent absence from the scheme
Furthermore, the allegation that "virtually all small and medium-sized private employers seldom participate in the scheme" is not correct. If that were true, where and how then did the NSITF collect the appreciable contributions of N33.89 billion between June, 1994 and March 2004 Unfortunately, the editorial failed to make any reference to the quantum of contributions collected in the periods of the NPF and NSITF. It would be useful to state that the sum of N923,329,329.53 was collected as contributions under the NPF scheme whilst a total of N33,887,468,144.62 has been collected under the NSITF within 10 years of its existence. This shows an appreciable growth rate of 3670.05 per cent. We wish to state that the contributions were not collected from ghost members, but existing members of the scheme. One may wish to ask if we have such staggering number of 20,449 big employers in the country that were registered by the NSITF from June, 1994 to March, 2004. Analysis has shown that small and medium-sized private employers constitute more that than 70 per cent of our membership.
The editorial's fixation on the 6,180 claimants per year under, NSITF, beclouds it from the appreciation that the Fund should receive for its well enhanced benefit profile. The sum of N752.84 million has been paid under the NSITF scheme as at 31st May, 2004, whilst the sum of N118.08 million was the total amount of benefit paid claimants in all of the 33 years of NPF era.
Sixthly, your allusion to "the widespread complaints about non-payment by NSITF of benefits as and when due including cases of missing numbers of registered members at the relevant NSITF offices" is untenable and unproven. Now, the gestation period of benefits has afforded the Fund the opportunity to ensure the completion of all necessary documentation in respect of monthly contributions paid by employer on behalf of its registered employee before the fulfilment of the qualifying conditions. The Fund does not receive any contribution without supportive documents, and where there is evidence of deduction by employer without remittance to the fund, the claimant will be settled by the Fund and thereafter take up the case with the defaulting employer.
That a claimant is denied his benefits due on account of missing numbers (numbers generated by the Fund) is therefore laughable. We still stand by the records of achievements made in benefit administration as contained in our publication i.e. the NSITF paid N662.181 million to 61,762 claimants from July, 1994 to March, 2004. Finally, the editorial further sought to pooh-pooh the set principles of "safety, liquidity, yield, diversity and socio-economic utility" guiding the Fund's investment when it derogatorily referred to them as "its Management Board's set principles." The set principles are not provincial in nature, but time tested tools of the good investor. This eclectic investment approach of the Fund has indeed yielded appreciable result for the Fund.
The Fund, like any public institution, has always been looking forward to well-thought out suggestions as to how it can improve on its service delivery effort. We still belief that a lot of valuable effort should be devoted just to that rather than the utterly uncharitable approach adopted by The Guardian in the editorial under reference.
Abdulahi is a Senior Manager in the Corporate Affairs Department of NSITF in Abuja.
