PENGASSAN to take actions over perceived irregularities on pension of members, engages PenCom, others
CHIGOZIE AMADI
The Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) has said it is making advocacy on organisations over the gaps in pensioners’ remuneration and pension in order for them to close the gaps to better the welfare of the pensioners.
President of PENGASSAN, Festus Osifo who stated this at the association’s One-Day Summit on the Future of Pension in Oil and Gas Industry in Abuja Thursday, said the association decided to engage PENCOM and other organisations saddled with the responsibility of paying pension to retired workers to do so with fairness and bridge the gaps in order to ensure good welfare of pensioners in the country.
Osifo said PENGASSAN observed that there was lacuna within the process of the fund, stating that people who retired several years ago can no longer meet the market demands as a result of the present economic realities.
He however noted that some of the managements over time, have been magnanimous to add little things to what pensioners were earning, stating that more could be done to bridge the gap.
According to the PENGASSAN president, “We actually decided to take up this issue, an issue that is bothering our close pension fund administration in Nigeria.
The reason is very clear. For those who didn’t really know, in 2004, we had the pension reform system in Nigeria.
So when that pension reform happened, we had a system whereby some companies started the pension fund administrators.
“Some of us do the contributory pension scheme. While others, there were some exemptions given to some companies to be doing the close pension fund system, what we call the defined benefit system.
So over time, in 2014, there was also a new legislation that came that now stops new employees from 2014 from joining the defined benefits.
“That means, even if you operate the defined benefits, the company like Chevron, the company like NSO, Settler, Total Energies, NNPC, DPRU, and all that, even when you operate that close pension fund system, so by 2014, there was a gap.
So, anybody that was employed into this organisation from 2014, could no longer join the defined benefits. You now need to be under the PFE.
“So, over time, we have realised that there is some level of lacuna within this process, and within the system, that people that retired several years ago, under the defined benefits, their remuneration, or rather, their retirement benefit has somewhat been capped.
Their retirement benefit does not, I mean, in some organisations, it doesn’t move. It’s always at management discretion.
“Some of the management over time, have been magnanimous to add little things to what the pensioners are earning. And we understand what inflation has done in Nigeria. We understand what devaluation has done to our remuneration.
“Imagine people that have retired 1990, imagine people that have retired maybe 2001, even 2010, as recent as 2010. So when they retire at that time, they’ll be going home with what they think is okay in terms of the value of our currency.
What, for example, we all know, what 200,000 Naira can buy for you in 2010, today, truly, it can no longer buy.
“So we have in one or two organisations, a system whereby, at the end of the year, we have the pension, it grows every year, due to a mechanism and a system that was put in place.
That’s maybe like in 5 or 10% of where we have the closed pension funds. But in a lot of other organisations, up to 90%, it doesn’t grow.
“What that means is that you are at management discretion, or you are at the discretion of the sponsor, because it’s actually the sponsor that is supposed to fund, to look at the gap within the fund and fund it.
And we’ve also observed, the regulators have, we’ve also observed that there are some assumptions that are made when they are doing actuarial valuations.
There are some assumptions that are made that at the end, okay, just for example, if you make some assumptions to say that the life expectancy, for example, in 1976 in Nigeria, the funds that you need to put into, I mean, you cannot assume that the fund is sufficient.
“But if you tweak that life expectancy for 76 to 80, for example, you are going to have some gap. So I think we have observed that in one or two organisations, we have that lacuna, whereby they determine what the life expectancy will be.
If not just life expectancy alone, there are some others that border on some of the assumptions that are made.
“Those assumptions that are made, we have observed that it determines how the fund, I mean, the gap that will be in the fund.
So I think that PENCOM should focus much more on it to ensure that those gaps are closed, to ensure that the funds are truly sufficient to take care of the pensioners and those that will join them in the future.
And also, I think, too, that PENCOM should also look at, you know, because people that retired several years ago, their pension can no longer do anything for them.
“So we are going to come to you, we are going to make very serious advocacy on this across the companies that are operating CPFA, because we think that there are some gaps that are not being met 100%.
And talking about PENCOM, we know very well, in fact, at the time I was a director in Total Energy CPFA and representing PENGASSAN. So within that time, I could conclude that one of the organisations that function extremely well in Nigeria is PENCOM”.
Continuing, the PENGASSAN boss said: “Do you know that at that time, PENCOM, even when they come to do some audits, if you give them water, they will not even drink.
If you give them tea, they will not drink. In fact, about a month ago, the DG of PENCOM paid us a visit, you know, in TUC office in Abuja.
“And there was some personal experience that I shared with her, that I just pray that they remain the way they were, the way we’ve known them five years ago, the way we’ve known them 10 years ago, they should remain like that, so that Nigeria truly will not happen to the organisation. Solidarity. So we thank you all for finding time to be here today.
“At the end of today, the expectation is that we come up with aggregates of opinion. We will not come up with a communique that we are going to use in engaging management of the respective organisations, in engaging the operators of the CPFAs across the oil and gas industry. The ones that are doing what is right, we thank you.
“The ones that are doing things to ensure that pensioners, you know, they are what they get at the end of the month, you know, continuously increase.
With the reality of time, we appreciate you. But for those organisations that are not doing what they ought to do, we are going to engage you, we will sit down with you and see how the lives of our pensioners will be much more rewarding.
“You have the past president here of PENGASAN, who laboured over the years, who is now on the other side. We just talked about who did a lot for the workforce in total energy.
“He was a very strong comrade during his time. He was the chairman of Otakot refinery. So the people today who are the pensioners in the oil and gas industry, they were veterans of the union in the past.
“It is our responsibility to take care of them because tomorrow we are also going to cross over and become pensioners as well. So that is why when we say injury to one, it is surely injury to all. When we say enjoyment, now, now, now and forever”.
