Paris Club refunds: Kaduna pays N21b pensions, death benefits

According to reports, the Kaduna State Government, on Monday, said it had, since June 2015, paid more than N17 billion in pensions to retirees, N4.11 billion in gratuity and death benefits to 1,654 persons.

Addressing a news conference, in Kaduna, Commissioner of Finance, Suleiman Abdu Kwari, explained how the Paris Club refund for the state was spent.

Kwari said workers in the public service had accumulated N6.87 billion in the contributory pension scheme since January 2017.

He said Kaduna State had no salary arrears, adding that those who believed that the Paris Club refunds were meant solely for salaries and pensions were mistaken.

He said investments in the future of young people and in the development of the state were equally important to the state.

The commissioner noted that civil servants in the state usually get credit alerts of their salaries around the 25th day of every month, stressing further that the state will continue to honour its commitments to workers and ensure that the best qualified teachers and civil servants remain in service.

Kwari said: “I wish to address and update you today on the payment of Pensions and issues around the Paris Club refunds to our state.

“Malam Nasir el-Rufai was the first state governor to disclose receipt of some Paris Club refunds. At the signing ceremony of the 2017 Budget in December 2016, the governor announced that the government would be approaching the Kaduna State House of Assembly for a supplementary budget to capture the refunds.”

” A supplementary budget was subsequently passed by the State House of Assembly which authorized the spending. Some sections of the elite have been obsessed by the said refunds and have pushed their own misinterpretations, oblivious of the facts.

The finance commissioner added:”The refund is money due to states whose accounts were over-deducted when Nigeria was settling its debt obligations to the Paris and London clubs of creditors in 2005. When the Federal Government of President Muhammadu Buhari decided on making the refunds, it was within a climate where several states were too stressed to meet their salary and pension obligations. The Minister of Finance agreed with State Governments to use at least 25% of the amounts to settle such arrears, but that did not mean that the refunds were meant solely for salary and pensions.”

“Thankfully, the Kaduna State Government has no salary arrears – only unpaid gratuities and death benefits inherited from previous administrations. Following the April 2015 elections, the Transition Committee reported that Malam Nasir El-Rufai’s government was inheriting about N14bn as arrears of gratuity and death benefits.

“Successive administrations in Kaduna State were unable to pay, or even determine the quantum of gratuity and pensions the state government was owing its workers. The lax and uncommitted implementation of the old contributory pension scheme compounded the issue.

“Therefore a 13-member committee set up in December 2015 to review the issue, submitted its report in June 2016. Regarding the old contributory pension scheme, for example, the committee found that although previous governments made contributions of N18bn to four Pension Fund Administrators for the Retirement Savings Accounts (RSAs) of 39,432 workers, they did not fund the RSAs of 21,173 workers, leaving outstanding liabilities ofN12.97bn. The PFAs were also to refund N1.621bn to 14,702 employees who had exited the contributory pension scheme.

“The government of Malam Nasir El-Rufai has been fulfilling its obligations to its retirees who receive their pensions promptly, often before current workers are paid their monthly salaries.

“Between June 2015 and October 2017, the Kaduna State government has paid the following monies to those workers who retired under the old defined benefits scheme:

1. N4.11bn as gratuity and death benefits to 1654 workers (639 state and 1,015 local government employees);

2. N17.26bn as pension payment for state (N11.24bn) and local government (N6.02bn) employees as follows:

3. June 2015-December 2015: N3.22bn 2015 (N2.22bn for state retirees and N1bn for local government retirees);

4. January 2016 – December 2016: N6.45bn (N4.6bn for state retirees and N1.84bn for local government retirees);

5. January 2017 – September 2017: N7.58bn (N4.41bn for state retirees and N3.17 billion for local government retirees);

Kwari explained further:”To insulate the state from the risks of unsustainable pension burdens arising from ever increasing Defined Benefits Pension scheme, the El-Rufai government has passed the necessary laws to regulate new, sustainable pension arrangements.

“On 1st January 2017, the new Contributory Pension Scheme took effect in the state. Since then, the 13% contribution (N1.553bn) from the state government, the 7% from workers(N835.7m) and the retirement benefits fund (RBF) have accumulated up to N3.49bn in the RSAs under the management of Pension Fund Administrators.

“At the local government level, similar contributions from the state government (N1.69bn), workers (N892.36) and the 5% retirement benefits fund have also accumulated N3.38bn in the workers’ RSAs. Therefore, the retirement savings accounts of current Kaduna State Government workers as a whole have accumulated N6.67bn since the contributory pension scheme commenced in January 2017.

“The state government has contributed N1.64bn to the Retirement Benefits Fund, lodged at the CBN.

“From the figures above, this government has paid more than the minimum portion required of the inherited arrears from its Paris Club refunds, and has deployed the balance for capital projects in education, healthcare, land administration and infrastructure (especially roads and water) all over the state. The future of our young people can only be secured by investing in their education, health and the infrastructure needed to create sustainable jobs, not the myopic and short-term preoccupations of some of our political elite.

“This government will not pay ghost workers just so that Labour unions will praise us. We will not keep unqualified teachers just so that we will be popular with a few, while destroying the future of our children.

“Rather than engage in the unedifying practice of peddling falsehood, any worker or interest group that believes it has a case can proceed to the National Industrial Court.”

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