Payment Of N40bn To Delta LG Retirees Transparent – Auditor General

THE Auditor -General (Local Government) Delta State, Mr. Ukpaka Ikenna has said that the disbursement of N40 bil­lion pension funds for 25 Local Government councils and Local Govt Education Authorities’ retirees in the state was carried out with utmost transparency and due process, insisting that no one was ripped-off.

Delta Pensioners under the aegis of Forum of Local Govern­ment Retirees (FOLGR) and Association of Retired Primary School Teachers (ARPST) had protested what they termed “unwholesome deductions “from their pensions and gratuities, al­leging that the Secretary to the State Government, Dr. Kingsley Emu and the immediate past state chairman, Association of Local Government of Nigeria, ALGON Hon. Victor Ebonka short-changed them.

However, in a swift reaction to the allegations, Mr. Ikenna de­scribed the claims of the retirees as impossible.

He said that no government official has access to the pen­sion funds, as it was exclusively domiciled with the Central Bank of Nigeria CBN, from where each retiree’s accrued right was transferred to their pension ad­ministrator.

Citing records, the Auditor- General who spoke in an inter­view disclosed that the sum of N39,635,600,548.00 had been successfully paid by the Bureau of Local Government Pensions to the retirees from the N40 billion pensions loan secured by the 25 local government councils

Mr. Ikenna said a total of 6,675 retirees had received their pay­ments since the disbursement started in October 2023 up till October 2024.

He emphasized that a strict computation system based on individual retiree’s age, salary grade level, career progression and years of service all com­bined to determine accrued right entitlement of retirees and the serving officers.

The Auditor General said that contrary to insinuations, the committee set up by the state government with the SSG as chairman, to ensure implementa­tion of the payment, discharged its duties faithfully and deserved all commendation.

“The Kingsley Emu- led com­mittee efficiently held forth before the inauguration of the Chairman and Secretary of the Bureau of Local Government Pensions. The SSG as a seasoned financial expert and technocrat brought his wealth of experi­ence and track record of fiscal management to bear in leading the committee with integrity, while the office of the Auditor- General for Local Governments along other members worked in synergy to make the whole exercise credible.

We will release a comprehen­sive report on the assignment very soon for the public to see.

“The committee carried out its assignment very well. The process of payment was very fair and thorough. The pensions and gratuities were paid directly to the beneficiaries by Bureau of Local Government Pensions and Pension Fund Administrators (PFAs) with the supervision of PENCOM. The funds are kept in CBN who released the Accrued right to the PFAs of Retirees after certificates had been issued to the retirees.

No one had access to the fund or tampered with it” Mr Ikenna said.

Corroborating the account of the Auditor-General for Lo­cal Governments, the Pension consultant, Mr Chidiebere Orji said the calculations of the re­tirees’ benefits were properly presented.

“The adoption of the Nigerian Pension Reform Act in 2004 later revised to 2014 brought about the change in payment of pen­sions and gratuities for employ­ees in the civil service.

“Prior to the Pensions Act, there was an old scheme in ex­istence. Gratuity benefits were paid to workers who left the civil service after a minimum of 5 years while pensions were given to those who retired after a minimum of 10 years’ service.

“The Gratuity benefits in the old scheme is determined by the years of service an employee has rendered. The gratuities scale starts from 100% for 5 years of service and terminates at 300% for 35 years of service. For the pensions scale, it starts at 30% of salary for 10 years of service and terminates at 80% of salary for 35years of service.The sum of these pension and gratuity benefits is what makes up the accrued pension rights of an employee.

“In the case of Delta local government employees and state workers, the adoption date for the Contribution Pen­sion Scheme was 31st March 2011.Thus the Accrued Rights reflected the value of pension and Gratuity benefits earned for services rendered up to 31st March 2011. From 1st April 2011, the Government started the remission of monthly pen­sion contributions to the PFAs of each Local Government Worker.

“At retirement, the benefits of each retiree is comprised of three components namely the accrued pension rights, the monthly contributions made to PFAs beginning from 1st of April 2011 and the investment income earned.

“A consultant was appointed in the past by the state govern­ment to do this computation for the state and local government workers and the consultant came up with his figures. In 2016, the state government hired our con­sulting firm to review the entire computations.

“The financial assumptions used by the former consultant was a discount rate of 10% per annum whereas we discovered that it should have been 13.5% per annum based on the yields on FGN bonds as at March 2011.

“The second financial assump­tion used by the former consul­tant was a future salary increase rate of 8% per annum, while we discovered that they shouldn’t have been a future salary in­crease assumption because the aim of the accrued pension rights valuation was to calculate the benefits earned up to March 2011 and not after that period.

“The third assumption we faulted was pension commence­ment age of 45 years recom­mended by the former consul­tant, because it was a serious er­ror. The assumption implied that the local government workers pension would commence from age 45 years. This is wrong as a good number of the Local Gov­ernment workers were already aged between 46 to 59 years which means that they have been collecting salary and pensions from the Government since they attained 45 years of age. You can either be an employee or retiree at any point in time.

“We corrected this error by ensuring the computations al­lowed for the commencement of pension payments from either 60 years of age or 35 years of service (whichever comes first), as applicable in the state civil service rules. Our computations conformed with accepted Actu­arial standards as required by the new pensions Act. No re­tiree was cheated as erroneously claimed “he said.