The Nigeria Union of Pensioners under the Contributory Pension Scheme has called on the Federal Government and the National Assembly to review pension and gratuity benefits in line with constitutional provisions, rather than the Pension Reform Act 2014.
The appeal was made by the Chairman of the Bauchi State chapter of the union, Yahaya Jauro, in an exclusive interview with Arewa PUNCH on Sunday.
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Jauro explained that the Pension Reform Act, first enacted in 2004 and reviewed in 2014, is due for another review after ten years, adding that the union wants the ongoing legislative process to address what he described as “fundamental contradictions” between the Act and the 1999 Constitution.
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“Before the Pension Reform Act, pension and gratuity in Nigeria were paid strictly based on constitutional provisions.
“Now that the Act is undergoing another review, we want to take advantage of this opportunity to accommodate our salient cries so that retirees can have space to breathe,” he said.
According to him, Sections 173(3) and 210 of the Constitution clearly stipulate how pension and gratuity should be computed.
He noted that under the old constitutional system, a worker retiring after 35 years of service was entitled to 80 per cent of his monthly gross salary as pension and 300 per cent of his annual gross salary as gratuity.
Jauro illustrated this with an example of an officer who retired on Grade Level 14, with an annual salary of about N6.2m.
“Three hundred per cent of that amount gives over N18m as gratuity, while 80 per cent of the monthly salary comes to about N414,000,” he said.
He argued that under the current Pension Reform Act, the same retiree would receive about N12m as gratuity and roughly N103,000 monthly as pension, a sharp reduction from what the Constitution provides.
“Everything in life is reviewed, including salaries and pensions, which the law says should be reviewed every five years,” he pointed out.
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“But even if this Act is reviewed daily, it will never meet up with what the Constitution provided. That is why we say the Act contradicts the Constitution and is therefore null and void,” he added.
Despite his criticisms, Jauro acknowledged that the Act has brought some economic benefits, including the establishment of agencies such as the National Pension Commission, Pension Fund Administrators and Pension Fund Custodians, which he said have created jobs and driven investments in the economy.
He called for an increase in the government’s contribution from the current 10 per cent to 30 per cent, arguing that the contributory scheme was only meant to help government save in advance and invest funds to meet pension obligations, not to absolve it of its constitutional responsibilities.
Responding to questions from our correspondent on whether the union had been given an opportunity to make inputs into the ongoing review, the union chairman averred that the National Assembly had invited contributions and that the union had made both written and verbal submissions.
“There is no big deal, just lift Section 210 on gratuity and replace it with Section 7(1) of the Act, and lift Section 173(3) and replace it with Section 4(1)(a) of the Act. That settles the issues of pension and gratuity,” he said.
Jauro disclosed that submissions had been made to the House of Representatives and Senate committees handling the review, as well as to PenCom, all of which, he said, acknowledged receipt.
While speaking further on concerns about whether the review would apply to current retirees or only future ones, he insisted that a proper constitutional review would require the government to pay outstanding gratuities and make up the shortfall in pensions already paid under the Act.
“If we want to be law-abiding citizens, the government must obey the Constitution.
“And if it refuses, the court of law is there. We are ready to approach the courts to compel compliance,”he maintained.
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The pensioners’ union leader went philosophical, saying, “This struggle is like the Chinese man digging a mountain. Even if we don’t finish it, our children and grandchildren will continue, until one day the mountain is dug out.”
Punch