By Damilola Omosebi
The fraud surrounding the NEPA/PHCN Superannuation Fund and Contributory Pension Scheme (CPS) represents a systemic betrayal of Nigerian workers, marked by mismanagement, embezzlement, and institutional negligence. Below is a detailed analysis of the issue, supported by evidence from the provided search results:
Background of the Schemes
The NEPA/PHCN Superannuation Fund was established to provide retirement benefits for employees, funded by a 25% contribution from staff salaries, managed jointly by PHCN management and union trustees . The Contributory Pension Scheme (CPS), introduced in 2004 under the Pension Reform Act, aimed to modernize retirement benefits. However, both schemes became mired in corruption. For instance, the Superannuation Fund was structured as a “non-contributory” scheme, where contributions were supposed to be sourced from PHCN’s internally generated revenue rather than direct salary deductions; a design flaw that enabled misuse .
- The Fraud Unveiled
- Missing Funds and Diversion
- Over N270 billion earmarked for the Superannuation Fund was reported missing by 2012, with only N3 billion traceable in accounts. Investigations revealed that funds were diverted to a shadow entity, NEPA Superannuation Fund Limited, registered in 2005 by PHCN insiders without government oversight . Directors like Timothy Olufemi Akintola and Vincent Mamudu held millions of shares, while PHCN itself was allocated 6 million shares, raising questions about conflicts of interest .
- The scheme operated like a Ponzi scheme, where funds meant for retirees were used to pay active workers, creating an N85 billion deficit by 2004 . Former Power Minister Bart Nnaji labeled it “illegal” and accused PHCN of “creative accounting” to mask the shortfall .
- Failure to Implement CPS
- After the Superannuation Fund collapsed, the government transitioned workers to the CPS but failed to remit 15% contributions (7.5% employer + 7.5% employee) as mandated. By 2012, only N34.4 billion of the required N144 billion severance package was allocated, leaving workers with paltry payouts .
- Documented Mismanagement
- Retirees reported that pension records were falsified, and arrears approved by President Goodluck Jonathan in 2010 (a 33% increase) were never paid. Instead, the Pension Transitional Arrangement Directorate (PTAD) unilaterally reduced payments to 9.7%, citing a “special salary structure” for PHCN staff; a claim disputed by retirees .
Impact on Workers
- Destitution and Death
- Thousands of retirees, some aged 60–90, have been stranded for 22 years without full payments. Many died waiting for their entitlements, while others face health crises without funds for medication . For example, Gabriel Biobaku, a retiree in the U.S., was denied pensions due to biometric verification hurdles despite submitting proof of life .
- Erosion of Trust
- Workers accused PTAD, the National Salaries Commission, and union leaders of colluding to withhold funds. Retirees highlighted how N25 billion budgeted for payments from 2017–2022 was never disbursed . Legal battles, including a lawsuit led by Femi Falana (SAN), forced PTAD to make partial payments but failed to resolve systemic issues .
- Legal and Bureaucratic Obstacles
- The National Industrial Court (NIC) dismissed retirees’ claims, siding with PTAD’s 9.7% settlement. Retirees criticized this as a “fraudulent out-of-court settlement” orchestrated to avoid accountability .
Recommendations for Reform
- Forensic Audit and Prosecution
- A transparent audit of NEPA Superannuation Fund Limited and PTAD’s operations is critical. The 2012 investigation panel authorized by Bart Nnaji should be revived to trace diverted funds .
- Immediate Compensation
- The government must release N25 billion already budgeted for arrears (2017–2022) and honour the 33% increase approved in 2010 . Retirees like Biobaku and Nojeem Salami (deceased) deserve posthumous justice .
- Systemic Overhaul
- Strengthen the Pension Reform Act to prevent future mismanagement. PTAD’s governance must be restructured to include retiree representation, ensuring transparency .
Conclusion:
The NEPA/PHCN pension scandal epitomizes institutionalized corruption and neglect. Retirees, who served Nigeria during their prime, now face abandonment due to fraudulent schemes and bureaucratic apathy. Without urgent intervention, this betrayal will perpetuate a cycle of poverty and erode public trust in Nigeria’s pension systems. As one retiree lamented: “We served our country, but our country has forgotten us” .














