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FG, PHCN workers Renew N250 billion Pension Row

By on October 15, 2012

PHCN Workers Protesting

The controversial issue of pension and gratuity for the Power Holding Company of Nigeria (PHCN) workers has come to the forefront again even as the Federal Government and PHCN workers may resume negotiations next week.

 Both the FG and the National Union of Electricity Employees and the Senior Staff Association of Electricity and Allied Companies have all along been very stiff with their terms, which have led to no agreement so far.

The leaders of the Union requested for N450bn for pension and gratuity to workers but government has stood its ground that not more than N200bn will be spent on the payment of pension and gratuities to the workers.

The FG negotiation committee last met on the 29th of August 2012 without making any progress.

Labour leaders have accused the FG for deliberately frustrating the talks by not inviting the unions for discussions. However, both sides have remained resolute on their positions.

The disagreement over the pension and gratuities of PHCN workers grew deeper as the investigation committee on PHCN, headed by a former Auditor General of the Federation, Mr. Joseph Ajiboye, made the following recommendations:

  • That the committee was not comfortable with the pension arrangement in the PHCN, which 25 per cent of the total emolument is paid to workers pension and gratuity as opposed to 25 per cent of the basic salaries of workers.
  •  That the then board of the PHCN be sanctioned, said the decision influenced considerably on the pension problems of the FG to PHCN workers to the tune of N14bn.

The government was more comfortable with the recommendations of the Sub Committee on Negotiation lead by the former Permanent Secretary in the Ministry of Labour and Productivity Dr. Timiebi Koripamo-Agary.

The Agary Committee recommended that the issue be determined in harmony with the provisions of the 2004 Pension Act.

According to Koripamo-Agary, “The rights of the affected members of the staff of the PHCN should be transferred to the retirement savings account with effect from 2004 when the Pension Act took effect and be provided with the 7.5 per cent contribution expected from the employer as stated in the act.”

Koripamo-Agary’s suggestions were received by the Ajiboye committee, which believed that they were just and in accord with the provisions of the law.

The suggestions of the committee include the cessation of the NEPA/PHCN Superannuation Fund design as of June 30, 2004, as well as the running of the provisions of the Pension Reform Act (2004).

The committee stated, “Transfer the accrued persons rights of staff as of June 30 2004 to their retirement savings account; provide 7.5 minimum employer contribution on active employee monthly emoluments from 1st July 2004 through June 30 2012, and “to pay the outstanding 7.5 per cent for the employees.”

“The sum of N35.4bn is estimated for the 15 per cent total contribution to be paid into the employees’ retirement savings account (that is, 7.5 per cent employee contribution and 7.5 per cent employee’s contribution.”