Why Labour, OPS hold different opinions on Govs plans to borrow pension fund

Members of the Organised Labour and Organised Private Sector (OPS) has differed over Government plan to borrow N17 trillion from workers pension fund.
While Labour condemned the plans and considered it as plans by the 
36 States Governors to siphon the pension funds, the OPS said there would not be any problem as far as provisions of the PRA 2014 are strictly adhered to.
The Association of Senior Civil Servants of Nigeria (ASCSN), lamented that the Governors, some of whom their States have not contributed a dime to the pension funds were now desperate to collect ₦17 trillion out of it to massage their insatiable greed.
The ASCSN Secretary General, Alade Bashir Lawal, urged the National Pension Commission (PenCom) not to release any money from the pension funds to the Governors under the guise of loan or face the wrath of millions of Nigerian workers.
According to the ASCSN citing information from PenCom, as at June 2020 only four States of the Federation and the Federal Capital Territory had reasonable level of compliance in pension fund contributions.
”Although 25 States have issued legislation on contributory Pension Scheme, only four States namely Osun, Lagos, Delta, and Kaduna are in high compliance of remittance to PenCom.
“In States that have Pension Schemes, retires are not paid their benefits two to six years after exiting service,” the union said.
The ASCSN wondered what rate of interest would be paid on the loan, how would the loan be recovered, and what collateral would be provided.
It expressed worry that Governors, some of whom collect about ₦1billion monthly as security votes could not plough such funds into infrastructural development but instead were insisting on liquidating pension funds of workers they have denied any meaningful dividend of democracy over the years.
“Besides, there are so many untapped natural resources in the states that the Governors can harness to generate funds for development instead of looking everywhere for free money to appropriate and divert for private purposes.
“But the Governors should be told that the pension funds are not idle or free money, but are funds meant to pay employees their retirement benefits after serving their employers for years,” the union emphasized.
The union maintained that PenCom should not, under any circumstances, succumb to pressure by the Governors to dip their fingers into pension funds contributed by workers from their meagre salaries.
However, the Nigeria Employer’s Consultative Association (NECA) said it has has no reason to believe that the relevant extant laws: PRA 2004 and 2014 and the Investment Regulations won’t be adhered to by the PFAs and PENCOM, the Regulatory Body.
“We are not unaware that part of the water tight Investment Regulations issued by PenCom to Pension Fund Administrators stipulated that investment of pension assets for infrastructure development must: be through infrastructure Bonds and up to a maximum of 15% and 5% of Assets under Management respectively, have Risk Management and Investment Committees of the Board to instill high level of governance and ensure that all investments are as stipulated in the Pension Reform Act and meet the quality requirements enshrined in the Regulations,” he said.
He said employers’ of Labour in Nigeria has implicit confidence in PENCOM, especially now that the confidence of Contributors and Stakeholders have been reinforced with the setting up and inauguration of the Governing Board for oversight responsibilities.
According to him, “as long as any decision to invest part of the Pension Fund Assets are strictly based on the provisions of the PRA 2014 and existing Regulations of Investment, which guarantees safety, transparency, fair valuation and thus removing all ambiguity, there won’t be any need for concern, at all”
Dr Olawale further noted that given the valuation of the pension assets as at October 2020 (which is N12.05 trillion), up to the sum of N2.4 trillion is the maximum that could be invested by the PFAs in infrastructure funds and bonds and not N17 trillion as being speculated. “Even then, this is not given or automatic, considering the non-availability of eligible instruments (funds and bonds) in the financial market to invest the pension assets for infrastructure development,” he said.