The Federal Government’s plan to borrow N2 trillion from the current N10 trillion pension funds to finance its infrastructure in the country has attracted flaks from the beneficiaries.
The Vice President, Yemi Osinbajo at the National Economic Council (NEC) meeting, which he presided over recently announced that the government had concluded plans to borrow the amount for infrastructure.
The United Labour Congress (ULC) unambiguously submitted that the future of Nigerian workers cannot be guaranteed “if a large chunk of pension funds are controlled by crass, profligate and often insensitive politicians famous for their careless handling of public funds.”
The Nigeria Labour Congress (NLC), on the other hand, reminded the government that the Contributory Pension Scheme, which came into being in 2004 is fully funded by workers and employers, and privately managed by Pension Fund Administrators (PFAs), adding that the funds are in the individual Retirement Savings Account (RSA) of beneficiaries.
Joe Ajaero, the President of the ULC, said: “We find it difficult to muster any confidence from anywhere to entrust our livelihood in the hands of a group that has historically and systematically decimated our collective resources over the years, pauperising us at the slightest opportunity, without any conscience.
“We do not have confidence in the sincerity of our politicians to deliver on the area of safety of our life-savings when it is entrusted into their hands. They have already gorged themselves full with public wealth and nothing will stop them from doing the same with the pension fund if we are not watchful.”
He urged the Federal Government “and any other person thinking of cornering “workers’ money” through the pension fund to look elsewhere. It is ill-advised and will threaten our future. Nigerian workers work for their retirement benefits, as they do not enjoy while at work.
“It is, therefore, immoral and careless to subject such fund, which is the life-blood of Nigerian workers to the itchy-fingers of Nigerian politicians no matter how well-intentioned, especially when we know that ‘the way to hell is littered with good intentions,” Ajaero said.
While faulting the government’s plan, Ayuba Wabba, the President of Nigeria Labour Congress NLC, explained that the main objective of the scheme is to ensure that after retirement every worker in public or private sector who had contributed to the scheme receives his/her retirement benefits as at when due.
Wabba added that the N10 trillion pension fund is not warehoused in the pension commission (which is the regulator), the Central Bank of Nigeria, the Pension Fund Administrator, or the pension fund custodian. The fund is warehoused in the private individual Retirement Savings Accounts (RSA) of contributors, who are workers and beneficiaries.
He further explained that the guidelines on investing pension funds, which had the input of organised labour, pension union has the primary objective of an adequate return on investment and the safety of the fund.
The NLC boss pointed out: “The pension fund administrators are investing for maximum return on investment for the benefit of the beneficiary and not borrowing. The Pension Reform Act 2014 provides for investments, not borrowing. The Pension Fund Administrators (PFAs) is to invest based on their risks and reward appetite; but usually in minimal risk entities. They are not to be coerced or cajoled to invest because it is criminal to do so.”
The NLC chief said labour is curious that as a critical stakeholder, as provided in the Act, both NLC and Trade Union Congress (TUC) was not consulted on the borrowing.
“It is equally a violation of a provision of the Pension Act five years down the line, the board of Pencom statutorily saddled with taking or approving decisions as weighty as this has not been constituted. Pencom is a very critical labour market institution,” he stated.
He reiterated that labour concern is further deepened by the fact that at the moment, government’s indebtedness to pensions in accrued rights, pension differentials, minimum pension guaranty, pension increase, etc. are in excess of N400 billion.