The Nigeria Labour Congress (NLC) has opposed plans by the Federal Government to borrow N2trn out of the Contributory Pension Fund of N10 trillion for infrastructural development.
President of the NLC, Ayuba Wabba, made the congress’ position known while addressing newsmen during the meeting of the National Administrative Council of the congress on Tuesday in Abuja.
He noted that the recent approval by National Economic Council for the Federal Government to borrow the said money to finance the development of national infrastructure was devoid of effective consultation with the stakeholders who collectively own the funds.
Ayuba maintained that government should realise that pension funds was a joint contribution belonging to workers and the employers, and so cannot be borrowed at will.
He said: “Government needs to be reminded, that the contributory pension scheme which came into being in 2004 is fully funded by workers and employers and it’s privately managed by Pension Fund Administrators (PFAs).
“The funds are in the individual Retirement Savings Account (RSA) of beneficiaries.
“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.
“It is important to stress that the N10 trillion pension fund is not warehoused in 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 of contributors, who are workers and beneficiaries.
“The guidelines on investing pension funds, which had the input of organised labour, pension union has the primary objective of adequate return on investment and the safety of the fund.
“The pension fund administrators are investing for maximum return on investment for the benefit of the beneficiary and not borrowing.”
The NLC President noted that the Pension Fund Administrators are to invest based on their risk and reward appetite; but usually in minimal risk entities.
He stressed that they are not to be coerced or cajoled to invest because it is criminal to do so.
“It is curious that Labour as a critical stakeholder as provided in the Act was not consulted. It is equally a violation of 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.
“Our 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, among others is in excess of N400 billion. Government has to be inclined to pay this debt,” Wabba said.
Consequently, he said, NLC strongly advised government to shelve its plan and not do anything that would undermine the integrity of the pension scheme.
On the current security challenges in the country, Wabba posited that the Federal Government was in dire need of assistance on how to address the challenges.
To that effect, he said that the congress had decided to convene a national peace and security summit, to proffer ideas on how to help the government deal with the challenge.
According to him, the situation on ground did not call for blame game from Nigerians, rather, he said efforts should be geared towards salvaging the country.
He also said that the recent acceptance by the Federal Government of a regional security outfit established by South West Governors, code named Amotekun, was a welcomed development.
