BY NKECHI NAECHE–-The allegations listed in the House of Representatives Resolution against the National Pension Commission (PenCom) for infractions of the Pension Reform Act (PRA) 2004 as repealed by PRA 2014 are completely incorrect and unfounded, the Acting Directing-General, Mrs. Aisha Dahir-Umar has said.
Mrs. Umar-Dahir made this known during the House of Representatives Ad-Hoc Committee Public Hearing to Investigate the Activities of PenCom and Violation of the Pension Reform Act (PRA) 2014 held at the National Assembly Complex, Abuja.
In her response to the Ad-Hoc Committee over the allegation, she said the members of staff and management team of the commission has always operated in accordance with the Act like it is their bible.
She said that it is the contention of the commission that the House of Representatives was misled by the motion moved in the House on 29 November, 2018.
The Ad-Hoc Committee had alleged that the commission unduly created an impasse in the matter of appointment and resumption of duty of the members of the Board of the Commission; Illegal creation of additional Directorates and appointment of more directors, thereby increasing the number from 10 to 17 directors; and Illegal increase of Commission’s Staff End of Service Benefits by 300 per cent among others
Speaking on allegation of unduly creating impasse in the matter of appointment and resumption of duty of the members of the Board of the commission, she recalled that following the dissolution of the erstwhile management of PenCom on 13 April, 2017 along with the managements of 22 other Agencies and Parastatals, the Federal Government announced the names of a new management team subject to confirmation by the Senate.
She said: “You will further recall that on 27 May, 2017, the Federal Government reconstituted the nominated team subject to Senate confirmation. In the interim, however, the Federal Government directed the undersigned, as the most senior career staff of the commission, to superintend the affairs of the Commission in acting capacity, pending assumption of duty by the appointed members of the Executive Management. Consequently, we have in the Commission since April 2017, only a transitional management run by career staff of the Commission.
“By virtue of Section 19(3) of the PRA 2014, the President has power to appoint the Chairman, the Director-General and Commissioners of the National Pension Commission, subject to confirmation by the Senate. The career staff of the Commission absolutely do not have any role orinfluence on decisions taken by either the Executive or Legislative arms of the Federal Government in the matter of appointment to the Board of the Commission. It is, therefore, incorrect to allege that the current transitional management is stalling the appointment or assumption of duty of the new Board members.
“On illegal creation of additional Directorates and appointment of more directors, thereby increasing the number from 10 to 17 directors. Section 30 of the PRA 2014 provides that the structure of PenCom shall comprise “Divisions, Departments and Units as may be approved by the Board from time to time”. The current organogram of the Commission was approved by the Board of the Commission at its 46th meeting held on 12 June, 2015, with a structure of 5 Divisions and 20 Departments. Please find attached as Appendix 1, a copy of the Organogram of the Commission for your review. This structure subsists to date and has not been altered. Consequently, it is incorrect to state that additional Directorates have been created by the Commission during the current transitional period.
“Furthermore, the Commission has not recruited any additional General Manager (i.e. Director) since the beginning of the transitional period in April 2017 to date. What happened was a normal and duly approved promotion exercise for career staff of the Commission, where three Deputy General Managers were promoted to the grade of General Managers after duly satisfying the established criteria in accordance with the terms and conditions of their employment. The Ad-hoc Committee may wish to note that the Report of the Annual Staff Performance Appraisal exercise, containing recommendations for promotion to General Manager and other grades, was approved by the Secretary to the Government of the Federation (SGF) on 18 April, 2018, in the absence of a functional Board of the Commission. This is consistent with the provision of Section 17(5) of the PRA 2014 and Section 9 of the First Schedule to the PRA 2014, as well as Mr. President’s directive of 16 July, 2015 to all MDAs whose Boards were dissolved that issues requiring approval of Boards should be referred to him for decision through the respective supervising Ministries.
“Also note that since the inception of the transitional management in April 2017, PenCom has not undertaken any staff recruitment. The recruitment undertaken by the erstwhile Executive Management on the eve of their departure was suspended by the House Committee on Federal Character due to issues associated with the process.
“Illegal increase of Commission’s Staff End of Service Benefits by 300%. Pursuant to Section 4(4)(a) of the PRA 2014, an employer may undertake to pay to his employees upon retirement, additional benefits other than the pension contributions into the Retirement Savings Account. Consistent with this provision and following the implementation of the Federal Government policy on 8-year tenure for Directors, the Board of the Commission approved, at its 46th meeting held on 12 June, 2015, an End-of-Service Benefits package for General Managers who have served for a minimum of 5 years on the grade. Furthermore, at its 235th meeting held on 4 August, 2016, the erstwhile EXCO extended on separate terms and conditions, the implementation of the End-of-Service package to cover all other staff of the Commission. The latter was not approved by the Board prior to its dissolution by the Federal Government.
“The Federal Government subsequently in 2016, suspended the policy on 8-year tenure of Directors, which substantially formed the basis of the approved End-of-Service Benefits package for General Managers. In consequence of this policy suspension, the erstwhile Management of the Commission halted the implementation of the End-of-Service benefits for General Managers and commenced a review of same to standardize the benefits payable to all eligible staff on General Manager grade, align the benefits with the policy shift on tenure and ensure affordability and sustainability of the Scheme. Unfortunately, the review exercise embarked upon by the erstwhile management could not be approved by the Board before its dissolution by the Federal Government.
“Accordingly, and in the absence of a functional Board, the revised terms of the End-of-Service Benefits Scheme for both General Managers and other staff of the Commission were submitted to the Secretary to the Government of the Federation (SGF) for approval, which was graciously granted on 30 June, 2017.”
She stressed based on the clarifications and information given, the allegations of infractions of the provisions of the Pension Reform Act 2014 against the Commission are both fallacious and unfounded.
“The enormous achievements recorded by the Commission in the implementation of the pension reform from 2004 to date. Indeed, due to its consistent exemplary performance as a regulator in the financial services industry, PenCom gained unprecedented public confidence and acceptability. Thus, within the short period of its existence and operations, it was able to birth and successfully nurture the pension industry that boasts of accumulated a pool of long term pension assets worth about N8.63 trillion as at December 2018. About 60% of the total pension assets belongs to the private sector. In addition, the industry has not recorded any case of fraud or mismanagement of pension fund assets;
“Consistent with its track record of performance, the Commission was able to record many feats within the current period of transitional management that commenced from April 2017 to date. These include growing the asset base from N6.42 in March 2017 to N8.63 as at December 2018; increased contributor registration from 7.6 million to 8.41 million RA holders as at December 2018; introduction of the Multi-fund structure of pension fund investment; reduction of management fees; introduction of the Micro Pension Plan; and many other major feats.
“The Honourable members of the House Ad-hoc Committee are, therefore, urged to disregard in their entirety, the allegations of contravention of the Pension Reform Act 2014 against the Commission for lack of merit. Instead, the Commission urges the National Assembly to continue to support its regulatory and supervisory activities to ensure the consolidation of the gains of the pension reform for the development of Nigeria in both the social and economic spheres.”
On the part of the Ad-Hoc Committee, a member Hon. Benjamin Wayo said it is wrong for the President to usurp the statutory roles of the board by directing the SGF to act on his behalf.
Chairman of the ad-hod committee, Hon Johnson Agbonayinmam however said constitutionally, the President can direct the SGF to act on his behalf, and that the case of the PenCom is not an exception.
Hon. Iboro Asuquo Ekanem, also questioned the legitimacy of the transitional management team by the commission, saying that the PRA of 2014 does not recognize such team.
The Acting DG clarified that transitional management is a mere semantic and an operational word used by the management to work as team.