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Reps under fire over Pension Act amendment

By Victor Ahiuma-Young & Favour Nnabugwu

STAKEHOLDERS in the pension industry have taken up arms against the House of Representatives over ongoing attempts at amending the Pension Reform Act, PRA, less than three years after it was amended in 2014. Specifically, they are kicking against the plan to exclude paramilitary institutions from the Contributory Pension Scheme, CPS.

From left: Chief Whip of the House of Representatives, Alhassan Ado Doguwa and Chairman House Committee on Pension, Honourable Hassan Adamu Shekrau during the public hearing.

In fact, a bill seeking to amend the Pension Reform Act, 2014 to exclude personnel of the Nigeria Police, the Nigerian Security and Civil Defence Corps, and Nigeria Customs Service, Nigerian Security, Civil Defence Corps, NSCDC, from the Contributory Pension Scheme, had on May 16, passed the second reading on the floor of the House of Representative was opposed. The bill, sponsored by Mr. Oluwole Oke, is also seeking to exempt the Economic and Financial Crimes Commission, EFCC, from the scheme.

At a public hearing on the bill  in Abuja, Nigeria Labour Congress, NLC; Central Bank of Nigeria, CBN; National Pension Commission, PenCom; Nigerian Police Force, NPF;  Pension Fund Operators Association of Nigeria, PenOp; National Insurance Commission, NAICOM and others, totally rejected  the plan, warning that it would among others, undermine the system.

President of NLC, Ayuba Wabba, who spoke, noted that the “bill looks good on the surface, but inwardly it will destroy the future of workers”, adding that “the position of the congress is that the bill should be dropped. The bill is not workable and  if implemented, it  will collapse the pension system.” He said the federal government could not absorb more financial burden going by the present low revenue.

Financial burden

Acting DG, PenCom, Mrs. Aisha Dahir-Umar, said the issues raised were challenges which were presently being worked on, adding that the challenges were temporal which would be resolved very soon. She said “It is wrong to ask one to give what he does not have.

The government has been borrowing to pay salaries and cannot continue to borrow to pay pension. There is no point legislating what you cannot enforce. It is too early to amend the law. If we allow this law pass we cannot recover. We should come together to sustain the gains of the CPS.”

Inspector General of Police, Ibrahim Idris, who was represented by Commissioner of Police, David Bodo, said the NPF Pension Fund Administrator, PFA, had done very well and that the Police is of the opinion that it would remain with the CPS. He called on the government to attend to issues already raised by the force which were being attended to by  PenCom, stressing that the welfare of the  Nigerian Police would be well taken care of under the CPS.

Former Director General of PenCom, Mohammed Ahmad, warned against the planned exclusion, noting that the number of people seeking exemption might be up 50 per cent of government workers, which government could not cater for. He contended that the budget could not sustain the exemption, insisting that “CPS remains a safe vehicle for creating national saving.”

President, PenOp, Longe Eguarekhide, said the critical thing with the CPS was funding, stressing that policy maker should always think of ways to improve lives instead of creating more burden for the government.

General Secretary of National Union of Textile, Garment and Tailoring Workers of Nigeria, NUTGTWN, Mr. Issa Aremu, in a statement argued that any private member’s bill which seeks to erode the gains of the 13 year old N7 trillion CPS in terms of coverage and resource pools is counterproductive and should not be encouraged.

Aremu who is also the Vice President of Industrial Global Union, African Region, said Pension Reform Acts of 2004 and 2014, were outcomes of executive bills which addressed the delicate interests of pensioners, government and the economy, noting that “in principle a private member’s bill informed by narrow and vested interest considerations cannot do justice to all.

The pensions of the nation’s working men and women in security services are better secured in a national contributory scheme than the old unfunded and unsustainable discredited  Defined Benefits Scheme (DBS). Until the recent pension reform, all stakeholders bore witness to ugly features of corruption, inefficiency and share looting which characterized  DBS.

To return to the old era means bringing back corruption to pension administration through the National Assembly.

“The Pension Act had just been amended through executive/all inclusive review two years ago. With all its globally acknowledged successes the contributory pension covers only seven million workers, to further ask for exclusion of the security agencies only undermines the scheme with all the attendant negative implications for Nigerian economy just coming out of recession. We call all members of the Assembly to reject the private bill which will return pensioners to the bad old days of non-payment of pensions.”


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