Breaking News

PENCOM’S Obnoxious 300% Severance Allowances

By Samsudeen Mohammed

Just almost at the time the former Director-General (DG) of the Security and Exchange Commission (SEC), Mounir Haliru Gwarzo, was charged to court by the Independent Corrupt Practices and Related Offences Commission (ICPC) for allegedly paying to himself N104.8 million in severance benefits, a reputable national daily also broke the news that the terminal benefits of Acting DG of the National Pension Commission (PENCOM), Mrs.Dahir-Umar, and other senior staff of the agency were radically increased  by a whooping 300 per cent.

The frontpage report also came with a rider that  the number of PENCOM General Managers (equivalents of Directors) was jerked up from 10 to a detestable 17. Courtesy of this development, a GM now heads the Protocol Unit, formerly manned by a mid-level staff.



The only explanation so far is that the bumper severance bonanza and nearly 100 per cent hike in the number of GMs were approved by the Office of the Secretary to the Government of the Federation (SGF). However, findings show that it was done under Mrs. Habiba Lawal as the Acting SGF, not by the current SGF, Boss Mustapha.

This has expectedly angered very many Nigerians, who wonder how on earth a government agency would dream of, let alone, implement such senseless and inconsiderate increases at a time most Nigerians cannot afford a meal in a day and when the President Muhammadu Buhari-led administration is doing everything within its powers to cut down on the cost of governance. Even the President has severally acknowledged that extreme hardship currently faced by Nigerians, assuring he was working hard to better their lives. But with developments at PENCOM, it is obvious some people in his government are not on the same page with him.

But above all, the development buttresses the yawning leadership gaps at the regulatory agency, which many have been complaining about. In a recent interview, the former Vice President of the Nigeria Labour Congress (NLC) and current General Secretary of the National Union of Textile, Garment and Tailoring Workers of Nigeria, NUTGTWN, Comrade Issa Aremu, described the situation as dangerous to the pension industry.

His words: “President Muhammadu Buhari has to quickly, as a matter of urgency, give priority to the proper constitution of the board of PENCOM. It is completely unacceptable to working people, we the contributors to the scheme, that a critical labour market institution, is board-less or without a board for almost two years. It is unacceptable. The former leadership was whimsically removed. That was bad enough…you now leave trillions naira pool of pension fund to be administered without a board. What happened to corporate governance?”

A visit to PENCOM’s website shows that whereas Section 31 of the Pension Reform Act (PRA) 2014 provides that “There shall be an Executive Committee of the Commission consisting of the Director-General and four Commissioners”, only the Acting DG, Mrs. Dahir-Umar appears on that page displaying the Executive Committee. The positions of Commissioner (Administration), Commissioner (Technical), Commissioner (Finance and Investment), and Commissioner (Inspectorate) are all blank.

The same stupefying vacancy meets the eyes when you click on the link of the Governing Board of the Commission. Section 19 (1) of the PRA 2014 provides that, “There shall be established a Governing Board for the Commission (in this Act referred to as “the Board”)”. Section 31 (2) provides that the Board shall consist of: a part-time chairman, who shall be a fit and proper person with adequate cognate experience in pension matters; the Director-General of the Commission; four full-time Commissioners of the Commission; a representative each of the following agencies and institutions: Head of the Civil Service of the Federation, Federal Ministry of Finance, Nigeria Labour Congress, Trade Union Congress of Nigeria, Nigeria Union of Pensioners, Nigeria Employers Consultative Association, Central Bank of Nigeria, Securities and Exchange Commission, Nigerian Stock Exchange, and National Insurance Commission. Sadly, apart from the Acting DG and the Commission Secretary/Legal Adviser (CSLA), Mohammad Sani Mohammad, everything else is blank. In the absence of these critical stakeholders, apparently nothing stops anyone from playing Ping-Pong with workers’ savings.

It is worth recalling that President Buhari appointed Mr. Funsho Doherty and Alh. Aliyu Dikko as the Chairman and DG of PENCOM, respectively, in April 2017, subject to Senate’s confirmation. Other members of Pension Executive Committee appointed were Mr. Manase Benga, Zaki Magawata, Ben Oviosun, and Nyerere Anyim, all subject to Senate’s confirmation. However, the then Acting President, Prof. Yemi Osinbajo, effected a slight change in the appointments on 27th May 2017 appointing Funsho Doherty as DG, subject to Senate’s confirmation, while he moved Aliyu Dikko to the Bank of Industry as Board Chairman. Alh. Ali Usman was appointed as the new Board Chairman of PENCOM, subject to Senate’s confirmation. This slight change may not be unconnected with some issues on Dikko’s qualification, being a player in the industry. The surprising thing, though, is that for over a year, the presidency is yet to forward the names to the Senate for confirmation.

This is a very big disservice to the pension industry, one of the few performing regulators under various administrations since its founding under Chief Olusegun Obasanjo. The EXCO and Board of PENCOM are not decorative ornaments. The law deliberately put them in place for the proper running of the multi-trillion naira industry. Nations that have prospered, invest their energies on building institutions through rule of law, not the goodness of those entrusted with power. American statesman and former President, Thomas Jefferson, wrote in the draft Kentucky Resolution in 1798:  “In question of powers, then, let no more be heard of confidence in man, but bind him down from mischief by the chains of the Constitution (law)”.

The Pension Reform Act (PRA) is designed in such a way that important decisions at PENCOM cannot be taken without the approval of the Executive Committee and PENCOM Board. For instance, Section 24 (n) states that the Commission can only “make changes to its structure with the approval of the Board”. Importantly, Section 25 (2)       (a)-(b) provides that “The Board shall have power to approve rules and regulations relating to the appointment, promotion, and disciplinary measures for the employees of the Commission” as well as “fix the remuneration, allowances and benefits of the employees of the Commission”.

The question then is: where on earth did they derive the powers to jerk up and paying the terminal/exit benefits  by a mind-jolting 300 per cent in the absence of a Board? Where on earth did they also derive the powers to create seven additional GM positions, even when the DG and about three others who ought to have retired are staying put? Also, how are increased terminal benefits and creation of more GM positions the priorities of the pension industry when critical mandates and laudable initiatives of PENCOM like stakeholders’ engagement, inspection, micro pension scheme, etc. have been neglected?

Meanwhile, the claim that the Office of the SGF approved these mindless and illegal increases is as annoying as it sounds obnoxious. When did the Office of the SGF become PENCOM’s Board and EXCO under the PRA 2014?     The Act places so many premiums on good governance of pension industry that it subjects PENCOM EXCO and Board Chairman to Senate’s confirmation. But, here, we have a former Acting SGF approving  humongous allowances. These emerging profligacies are hugely disappointing, especially for an agency that was a reference point in good corporate governance and uncompromising regulation just a few years back.

President Buhari should not only have the Acting DG reverse the inconsiderate and illegal 300 per cent increase in terminal benefits immediately, but should also insist that they return whatever they have paid to themselves to government coffers. Likewise, the seven additional positions of GMs should be scrapped forthwith.



Comments expressed here do not reflect the opinions of vanguard newspapers or any employee thereof.