LAGOS — THE Nigeria Labour Congress (NLC) is to challenge the constitutionality of the new Pensions Act recently passed by the National Assembly and subsequently signed into law by President Obasanjo. Labour said the law contravened the provisions of Section 173 of the Constitution.
Besides the constitutionality question, the NLC, the Trade Union Congress of Nigeria (TUC) and Congress of Free Trade Union of Nigeria (CFTU) at a joint press conference yesterday in Lagos listed major defaults of the new Pension Act such as the submerging of the existing and functional private sector pension schemes into the new act and lack of provisions for offsetting the over N3 trillion pensions arrears owed teachers, railways, military, Nigeria Airways and dissolved Federal Government agencies' retirees and vowed to engage and confront the government to ensure the payment of the liabilities.
The briefing was on the outcome of a workshop of organised labour held last Thursday in Abuja, to critically examine the new Pension Act. President of NLC, Comrade Adams Oshiomhole, speaking for labour, said there were unfinished matters as far as pension reform in the country was concerned which continued to create fears among workers and pensioners and pressed the need for the amendment of the Act to address identified inadequacies.
He said: “The labour movement recalled the earlier attention drawn to Section 173 of the constitution of the Federal Republic, which calls to question the competence of the National Assembly to legislate on the Pension Bill. Item 44 of the Exclusive Legislative list in the Constitution stipulates that the National Assembly can only legislate on ‘Pension, gratuities and other like benefits payable out of the Consolidated Revenue Fund (CRF) or any other public funds of the federation.’
Having gone ahead to legislate on the funds in the private sector domain outside its constitutional mandate, the NLC, TUC and CFTU resolved to seek legal advice on the constitutionality of the Pension Act and where necessary go to court to seek redress.”
He lamented that despite the public hearings by the National Assembly and sustained involvement of labour and other stakeholders in the pension reform discourse, the lawmakers, especially the Senate, ignored most of the views of stakeholders and merely acted on behalf of the executive and business interests.
Comrade Oshiomhole noted that this singular act had denied the law the critical legitimacy that an important agenda like pension reform required and accounted for most of the patent inadequacies.
“The Pension Act does not provide any effective and sustained strategy or measure to offset the existing pension liabilities, which was in the first place, the basis for the organised labour’s case for a reform that would guarantee a funded scheme.
Under the new law, the large number of pensioners of the primary schools, dissolved Federal Government boards, the military, railways, etc whose benefits were due for payment before the cut-off date were not taken into consideration. The situation of the arrears of pension and gratuity is even more deplorable in the states and local governments.
“The labour movement resolved to put on hold the earlier recommendation that the Federal Government should fund the offsetting of these liabilities by specially appropriating funds from the federal revenue, especially the excess returns on crude .
There will also be the need for consultation between the federal and state governments with a view to working out modalities for offsetting the arrears in other tiers of governments. In this respect, the Pension Act is expected to be made clearer in respect of pension administration in states, since pension is on the exclusive legislative list in the constitution.”
Organised labour added that among grey areas that must be revisited with a view to amending it included: “Clearly defined existing areas, such as the status of the Nigeria Social Insurance Trust Fund (NSITF), provisions for offsetting current liabilities, estimated at N3 trillion and concrete Federal Government guarantee for contributed funds.
Enact a fair rate of contribution that puts the rate of workers contribution at five per cent. Restore defined benefits in the form of lump-sum gratuity outside pension contributions in addition to the monthly pensions ensure adequate and equitable stakeholders’ representation on the National Pension Commission (NPC)’s board and executive directorate."
