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Tag: pension funds

  • I’ll declare nationwide protests if Governors borrow from pension funds – NLC President

    I’ll declare nationwide protests if Governors borrow from pension funds – NLC President

    The Nigeria Labour Congress (NLC) has warned state governors to stay away from pension funds or face massive protests.

    The warning came in a bit to stop state governors from borrowing N17 trillion from the pension funds purportedly for infrastructural development.

    The NLC President, Ayuba Wabba, insisted that the governors have no authority over the funds.

    He made this known while speaking at the 47th National Executive Council meeting of the Medical and Health Workers’ Union of Nigeria, in Abuja on Thursday.

    The Nigerian Governors Forum had last week endorsed the proposal of the Chairman of the National Economic Council Ad hoc Committee, Mallam Nasir el-Rufai, to borrow N17trn from the pension funds for infrastructural development.

    But reacting to the proposal, Ayuba said, “The pension is not for borrowing, pension money is the retirement savings of workers, it cannot be borrowed. It’s like money in your savings account that nobody can borrow.

    “You must go through the bank and in this case, you must go through the PFAs and their guidelines; even the guidelines they want to play down but to the glory of God, the board of Pencom commission has been constituted

    “I stand here to represent all of you (workers), we are not going to agree; less than 5 percent of the states are keying into the contributory pension, yet they want to borrow the money. The bulk of the money is from the federal government workers and private-sector workers; so how do you want to borrow from where you have not sown?”

    Ayuba also noted that over 18 state governments were delaying the implementation of the new national minimum wage.

    He added that it was unheard of that the same governments would want to borrow the workers’ pension.

    “It’s not free money, and let me sound a bit of warning: any day that we hear the pension fund, our money has been borrowed, I will declare a protest and everybody is going to be on the street to protect our hard-earned money.

    “The money belongs to workers, we contribute that money so that when we retire, we can have something for retirement, so they have no say whatsoever; both the principal and the capital belong to us,” he said.

    Commenting on the fuel pump price, Wabba argued that it should not be determined by the market forces “whose sole aim was targeted at making profits even at the detriment of the masses.”

    He noted, “Anything you leave to market forces, citizens will suffer because the primary focus of governance is actually to defend the interest and welfare of our workers and even the citizens and therefore when you leave it to market forces, it is then about profit.”

    The National President, Medical and Health Workers Union of Nigeria, Biobelemoye Josiah, condemned the Federal Government’s alleged involvement in scuttling strike actions through the use of some non-governmental organisations, stressing that workers have the right to embark on industrial actions to drive home their demands.

    He said, “In a plethora of cases, the courts have affirmed the right of the workers to embark on strike. Strike is a legitimate weapon available to the trade unions to ventilate their grievances, especially when the provision in section 41 of the Trade Dispute Act bordering on the number of days has been compiled with.

    “I would, therefore, appeal to the Federal Government to enrich our industrial relations practice through the interplay of the relationship between the management (Government) and the workers (Trade Unions) rather than scuttling the relationship through a third party interloper represented by the NGOs.”

  • SERAP asks Buhari to stop Governors from borrowing N17trn from pension funds

    SERAP asks Buhari to stop Governors from borrowing N17trn from pension funds

    Socio-Economic Rights and Accountability Project (SERAP) has sent an open letter to President Muhammadu Buhari urging him to use his “good offices and leadership position to urgently instruct the Director-General and Board of the National Pension Commission [NPC] to use their statutory powers to stop the 36 state governors from borrowing and/or withdrawing N17 trillion from the pension funds purportedly for ‘infrastructural development.’”

    The governors last week reportedly proposed to borrow around N17 trillion from the pension funds after receiving a briefing from the Kaduna State Governor, Mallam Nasir el-Rufai, who is the Chairman of the National Economic Council Ad Hoc Committee on Leveraging Portion of Accumulated Pension Funds for Investment in the Nigeria Sovereign Investment Authority [NSIA].

    But in a letter dated 5 December 2020, and signed by SERAP deputy director Kolawole Oluwadare, the organization said: “Allowing the governors to borrow from pension funds would be detrimental to the interest of the beneficiaries of the funds, especially given the vulnerability of pension funds to corruption in Nigeria, and the transparency and accountability deficits in several states.”

    SERAP said: “It is patently unjust and contrary to the letter and spirit of the Nigerian Constitution 1999 [as amended], the Pension Reform Act, and the country’s international anti-corruption and human rights obligations for the Federal Government and state governors to repeatedly target pension funds as an escape route from years of corruption and mismanagement in ministries, departments and agencies [MDAs].”

    SERAP expressed “serious concerns that the proposed borrowing by the 36 state governors from the pension funds would lead to serious losses of retirement savings of millions of Nigerians.”

    The letter copied to the Attorney General of the Federation and Minister of Justice Mr Abubakar Malami, SAN, read in part: “This proposed borrowing faces the risks of corruption and mismanagement, and would ultimately deny pensioners the right to an adequate standard of living and trap more pensioners in poverty. Rather than devising ways to address pensioner poverty, governments at all levels would seem to be pushing to exacerbate it.”

    “Allowing the governors to borrow money from the pension funds would amount to a fundamental breach of constitutional provisions, the Pension Reform Act, and Nigeria’s international obligations, as well as fiduciary duties imposed by these legal instruments on all public officers to prevent pension funds from unduly risky investments, and to ensure transparency and accountability in the management of pension funds.”

    “We would be grateful if your government would indicate the measures being taken to instruct the NPC to stop the 36 state governors from borrowing and withdrawing any money from the pension funds within 14 days of the receipt and/or publication of this letter.”

    “If we have not heard from you by then as to the steps being taken in this direction, the Registered Trustees of SERAP shall take all appropriate legal actions to compel your government to implement these recommendations in the interest of millions of Nigerian pensioners.”

    “It would also be very difficult to hold state governors to account for the spending of pension funds, as states have persistently failed to account for the spending of public funds including security votes.”

    “Transparency is a key instrument in the spending of any pension fund investment, as it is necessary to ensure the accountability of the funds. However, several states routinely claim that the Freedom of Information Act is not applicable within their states.”

    “Pension funds should not be used to make up for the failure of governments at all levels to cut the cost of governance, and the persistent refusal to reduce wastage and corruption in MDAs, as well as failure to obey court orders to recover life pensions collected by former governors and their deputies, and public funds collected by corrupt electricity contractors who disappeared with the money without executing any power projects.”

    “Many state governors have repeatedly failed to pay workers’ salaries and pensions; several states are failing to pay contributory pension. Therefore, allowing state governors to collect a windfall of pension funds at the expense of pensioners who continue to be denied the fruit of their labour would amount to double jeopardy.”

    “Fiduciary duties require public officers to ensure that pension funds are managed solely and exclusively for the benefit of pensioners, and to consider the socio-economic and human rights impact of pension investment decisions on the intended beneficiaries.”

    “Our requests are brought in the public interest, and in keeping with the requirements of the Nigerian Constitution 1999 [as amended], the Pension Reform Act 2014, and Nigeria’s international obligations, including under the UN Convention against Corruption, and the International Covenant on Economic, Social and Cultural Rights.”

    “Your government has a legal obligation under articles 1 and 5 of the UN Convention against Corruption to prevent and combat corruption effectively, to promote integrity, accountability and proper management of public affairs and public property, including pension funds.”

    “Public confidence and accountability in public administration are instrumental to the prevention of corruption and greater efficiency. Article 10 requires Nigeria to take measures to enhance transparency in its public administration relative to its organization, functioning, decision-making processes and/or other aspects, including pension fund investment. Nigeria has ratified the convention.”

    “Under section 85 of the Pension Reform Act, pension funds and assets can only be invested in accordance with the regulations set by the NPC. Section 100 prohibits mismanagement or diversion of pension funds. Therefore, the proposed borrowing by governors from the pension funds is implicitly inconsistent and incompatible with the letter and spirit of the Act, and with Nigeria’s international obligations.”

    “Several states have also failed to observe Convention No 29 on Forced Labour and other international standards on the right of workers to timely payment of salaries and pensions. Borrowing from the pension funds is also implicitly inconsistent with right to work recognized by various ILO instruments and article 6 of the International Covenant on Economic, Social and Cultural Rights, to which Nigeria is a state party.”

    “The right to work is essential for realizing other human rights and forms an inseparable and inherent part of human dignity. The governors cannot on the one hand fail to pay workers’ salaries and pensions while on the other hand proposing to withdraw money from pension funds.”

  • Pension Fund Operators endorse NPF Pensions’ demand for special gratuity for police retirees

    Nigerian policemen who have been groaning over poor retirement benefits since the introduction of the Contributory Pension Scheme (CPS) with the Pension Reform Act of 2004 will have cause to smile soon if feelers that emerged from a three-day investigative hearing by the House of Representatives Committee on Pensions is anything to go by.

    The investigative hearing organised to determine the level of compliance with the Act held between Monday, March 9, and Wednesday, March 11, at the National Assembly complex, Abuja.

    It was a huge boost for the management of the Nigeria Police Force (NPF) Pensions Limited and its clients, policemen, as its request for the approval of a special gratuity for police retirees at the rate of 300 per cent of their last annual gross pay was endorsed by the Pension Fund Operators Association of Nigeria (PenOp).

    In its submission on Monday, the operators who insisted that the major challenge faced by pension management was the backlog of accrued rights and pension arrears owed by the Federal Government, endorsed the demands of NPF Pensions Limited.

    “Some of our constituents, specifically the NPF Pensions Limited have some specific issues to bring to the attention of this committee,” PenOp said.

    “They represent a very critical segment of our society – the police force. We endorse their submission and urge you to take on board their recommendations.”

    In its special memorandum on the ways and means of addressing the plight of police retirees under the CPS which was submitted to the House Committee on Pensions, NPF Pensions Limited disclosed that a request had been made to President Muhammadu Buhari, which if approved, will resolve the issue of constant agitation for exit of the police from the Contributory Pension Scheme.

    Making the presentation before the Hon. Alhassan Kabiru Rurum-led committee, Dr. Sule Wuro Bokki, Managing Director/CEO of NPF Pensions Limited, said the PFA was seeking the president’s approval of special gratuity for police retirees at the rate of 300 per cent of their last annual gross pay so that the balances in their Retirement Savings Account (RSAs) will be channeled towards their monthly pension payments.

    Dr. Bokki said support for the request was anchored on Section 4 (4) of the Pension Reform Act which provides that an employer, notwithstanding the provisions of the Act, may agree on the payment of additional benefits to the employee upon retirement.

    The second request was the recognition and treatment of police officers from the rank of Assistant Inspector-General of Police (AIG) and above as public office holders who should retire with their full benefits, such as permanent secretaries pursuant to Section 7 of the Pension Reform Act.

    Bokki told the House Committee that whereas the RSAs of serving and retired police officers are being professionally managed by NPF Pensions Limited, and are covered by the same guidelines and safety nets covering the CPS, the issue of low pension can be administratively resolved within the ambit of the Act.

    “Our prayer, therefore, is that the Honourable House of Representatives should pass a resolution to the effect that to solve these agitations by police retirees, and for them to remain within the Contributory Pension Scheme, Mr. President should approve the request for improved pension benefits by the police, namely: special gratuity for retired police officers at the rate of 300 per cent of their last annual salary and recognition and treatment of retired police officers from the rank of AIG and above as public officers who should retire with their full benefits, such as permanent secretaries.”

    The current Inspector-General of Police, Mohammed Adamu, who adopted the position of his predecessor that if the two issues are favorably considered, it will permanently solve the agitation by police retirees to exit the CPS, has once again written to President Buhari to approve the request which has also been adopted by the Association of Retired Police Officers of Nigeria (ARPON).

    Speaking anonymously at the investigative hearing venue on Tuesday, a senior police (name undisclosed) who came to observe proceedings enthused that, “Now that the Pension Operators, an independent body established to promote the operations of the pension industry, provide for self-regulation and ensure that international best practices relating to the industry are observed by the operators, and which represents all the Pension Fund Administrators (PFAs), the Closed Pension Fund Administrators (CPFAs) and the Pension Fund Custodians (PFCs), have unanimously endorsed the request, the days of low pension benefits to police retirees will be over soon.”

    The public hearing was sequel to a December 5, 2019 motion in the House “on the need to investigate the non-remittance of contributory pensions by employers and delay or non-payment of entitlements by PFAs and general non-adherence to the provisions of the Pension Reform Act 2014.