By Anthony Isaac
The President of the Nigeria Labour Congress (NLC), Mr Ayuba Wabba, has expressed the opposition of the union to Federal Government’s plan to borrow N2 trillion from the Contributory Pension Fund to fund infrastructural development.
Wabba told journalists in Abuja on Tuesday during the meeting of a National Administrative Council of the congress on Tuesday in Abuja that fund was a joint contribution made by workers and government.
He explained that the National Economic Council recently gave approval to the government to borrow N2trn from the pension funds presently put at N10 trillion to finance the development of national infrastructure.
He said the decision was devoid of effective consultation with the stakeholders who own the funds collectively.
The NLC president said government should come to the realisation that pension funds was a joint contribution belonging to workers and the employers, hence cannot be borrowed at will.
“Government need to be reminded, that the contributory pension scheme which came into being in 2004 is fully funded by workers and employers and its 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,” he said.
Wabba said that the Pension Fund Administrators are to invest based on their risk and reward appetite; but usually in minimal risk entities.
He added that, they are not to be coerced or cajoled to invest because it is criminal to do so.
He said: “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 deepen by the fact that at the moment government’s indebtedness to pensions in accrued rights, pension differentials, minimum pension guaranty, pension increase, among others.
“These are in excess of N400 billion. Government has to be inclined to pay this debt,” Wabba said.
