•National Industrial Court: it’s gross social injustice to pay elected public officers, political appointees’ pension, severance allowance

•Commission seeks further amendments to PRA to address emerging issues, boost operational efficiency, unveils pension law report

James Emejo in Abuja

Director-General, National Pension Commission (PenCom), Ms. Omolola Oloworaran, has affirmed the role of the judiciary in resolving retirement benefits related disputes in the country.

Oloworaran said as final arbiters in matters brought before the courts, judges’ decisions had far-reaching implications for the interpretation and enforcement of pension laws and regulations.

Speaking at the opening of a sensitisation workshop on Contributory Pension Scheme (CPS) for judges of the National Industrial Court of Nigeria (NICN) in Abuja, the PenCom boss added that the commission deeply valued the objectivity, rigour and fairness that the judiciary brought to the matters.

Represented by the acting Commissioner, Administration, PenCom, Mr. Bello Abubakar Malabu, Oloworaran pointed out that it was imperative that judicial officers were well acquainted with the legal and regulatory framework governing the CPS, including the provisions of the Pension Reform Act (PRA), relevant regulations, guidelines and the operational procedures of the scheme.

President, National Industrial Court of Nigeria (NICN), Hon. Justice Benedict Bakwaph Kanyip, declared that it was not morally right to pay an elected public officer or political appointee pension and gratuity or severance allowance for holding such offices for three to eight years, as the case may be, while civil servants who worked for several years were poorly remunerated.

Kanyip, who gave the keynote address, said, “It cannot be justified in the context of our present social realities. It amounts to gross social injustice.”

The NICN president asked PenCom to consider other forms of pension.

However, pension and remuneration of political office holders are not under the commission’s purview.

Similarly, at the event, Kanyip unveiled the Pension Law Report, a compilation of judgements delivered on pension matters by the courts, particularly NICN.

Oloworaran stressed the importance of continuous judicial education in pension law and policy, as it not only enhanced the quality of adjudication but also contributed meaningfully to the development of jurisprudence in the important area.

She said the workshop was intended to provide clarity on the context, nature and structure of retirement benefits administration under the CPS.

It was also to address specific concerns, provide updates on ongoing reforms in the pension industry, and foster a better understanding of the commission’s role in safeguarding pension assets and ensuring the welfare of contributors under the CPS.

Oloworaran said, “We believe that your feedback and insights will be invaluable in shaping future reforms and ensuring that the pension system continues to serve its purpose effectively, which, ultimately, is the financial security of Nigerian workers in retirement.

“Associated with the above, and following the encouragement received from His Lordship, the Hon. President of the NICN during my courtesy visit to his office within the year, the commission embarked on the compilation of judgments delivered on pension matters by the courts, particularly the NICN.

“This compendium is a testament to the growth and development of pension jurisprudence in Nigeria. The commission is indeed grateful to His Lordship, Justice Kanyip, for the cooperation that enabled the production of the first volume in the series and for accepting to unveil the Pension Law Report.”

The PenCom head commended the industry and diligence of jurists whose judgements had set important precedents.

“Indeed, you have accorded pension matters a well-deserved place in the annals of judicial consideration,” she stated.

She seized the occasion to highlight the benefits of a unique pension product recently rebranded by the commission, Personal Pension Plan (PPP), which complements the mandatory CPS by offering greater flexibility and inclusiveness to participants.

She said, “The PPP is designed to cater for individuals who may not be covered under the mandatory scheme, including professionals, self-employed persons, individuals in non-traditional employment arrangements and those seeking to make voluntary contributions.

“We earnestly encourage your Lordships, and other Hon. justices and judges of all Superior Courts in Nigeria who are exempted from the CPS, to consider participating in the PPP as a means of enhancing your retirement security and that of your dependents.

“As custodians of justice, your welfare is paramount and PenCom remains steadfast in its commitment to working with you to ensure that this objective is fully realised.”

Commenting on the evolution of pension administration in the country, Oloworaran stated that prior to 2004, the country operated a Defined Benefit (DB) Scheme, which was largely unsustainable due to poor funding, lack of accountability, and mounting pension liabilities.

She said the challenges resulted in widespread hardship among retirees and imposed an unsustainable fiscal burden on the governments at the national and subnational levels.

In response, the federal government enacted the Pension Reform Act (PRA) 2004, which introduced the Contributory Pension Scheme.

Oloworaran said that marked a paradigm shift from a non-contributory, pay-as-you-go system to a fully funded, privately managed scheme based on individual Retirement Savings Accounts.

The PRA was subsequently reviewed and re-enacted in 2014 to strengthen regulatory oversight, expand coverage, and enhance the protection of pension assets.

Oloworaran disclosed that the commission was actively pursuing further amendments to PRA to address emerging issues, improve operational efficiency, and ensure that CPS remained responsive to the evolving needs of all stakeholders, including judicial officers.

She said, “PenCom is proud to report that within the last 20 years of its establishment, the CPS has modestly achieved many of the objectives of pension reform in Nigeria.

“However, the commission recognises that the transition from the DB Scheme to the CPS has faced some challenges. These include undue delays in the payment of accrued pension rights, untimely remittance of pension contributions and non-payment of other entitlements of public sector employees, including some judges who transitioned to the CPS prior to their elevation to the bench.”

She added, “The commission has worked tirelessly to surmount these and many other challenges. Indeed, I am glad to inform your Lordships that, through the intervention of President Bola Ahmed Tinubu GCFR, retirement benefits of retirees of Treasury-funded MDAs of the federal government are paid as at when due.

“Again, as part of our efforts towards resolving the issues relating to the accrued benefits of some judicial officers under CPS, the commission has opened discussions with the National Judicial Council (NJC) and is committed to ensuring that the issues are addressed in a fair and transparent manner for the benefits of the affected persons.”

Kanyip said, “Though not within the remit of the National Pension Commission, the payment of pensions and other retirement benefits to former governors and their former deputies who were not impeached is now questioned due to concerns about financial mismanagement and social injustice, and seen as a conduit for siphoning moneys, despite that it has constitutional backing in section 124(5) of the 1999 Constitution.

“So, as we look towards an effective retirement benefits administration under the PRA 2014, it may be necessary not to lose sight of other forms of pension.

“The payment of pensions to political office holders, for instance, appears to contradict the principles of public service and democratic values. and have the effect of making the contributory pension scheme pale into insignificance.”

He said, “Some quarters even see this law as illegal and immoral especially where the ex-governors collect both salaries and pensions as ministers as such the pension benefits of ex-governors run against the grain of constitutionalism and good conscience.

“The general issue of unmerited severance/pension rights especially for political appointees in the country has even generated negative judicial comment as the admonition by His Lordship Agim, JCA (as he then was) in Governor of Kogi State & ors v. Ahmed & ors21 shows.

“In the words of His Lordship: The fact that elected public office holders and political appointees are paid huge amounts of money as monthly salaries and other forms of allowances while in office is common knowledge in Nigeria and is not reasonably open to question. It is also common knowledge that many of them after an office tenure of between 3 to 8 years become stupendously wealthy, exhibiting mind blowing opulence and splendour.”

Kanyip added, “Yet these office holders insist on being paid severance allowance for holding such offices. Meanwhile, career civil servants who have served this country or their states or local governments all their life can hardly collect their pensions and gratuity when retired.

“They are now being subjected to contributory pension schemes in which they contribute part of their monthly meagre salaries that are always paid in arrears while in service to be able to earn pension and gratuity upon retirement.

“The political appointees and elected public office holders who do not work as long and as hard as the career civil servants quickly get paid huge severance allowances upon leaving office in addition to the huge wealth they acquired while holding such offices and without having been subjected to any contributory pension schemes.

“It is not morally right to pay an elected public officer or political appointee pension and gratuity or severance allowance for holding such an office for 3 to 8 years as the case may be. It cannot be justified in the context of our present social realities. It amounts to gross social injustice.”

According to him, service of one’s country, state or any community in an elected or political office is an honour, derived from the selfless nature of the service.

He stated that the purpose of public service was not to financially enrich the political office holder.

Kanyip said, “In our present situation where huge amounts of money are paid to the political office holder as salaries and uncountable number of allowances while in office, which amounts of money make him very rich before the end of the tenure of such office, any law that provides for the payment of pension and gratuity to such office holder after he leaves such office lacks moral justification, promotes social injustice and cannot be democratic.

“The fact that the right is provided for in the constitution and thereby made a constitutional right, does not make it morally right. It is an absurdity in a democratic constitution.”

He stated, “By section 124(5) of the 1999 Constitution, a State House of Assembly may pass a Law for the grant of a pension or gratuity to a former governor and deputy governor that was not removed from office as a result of impeachment.

“The experience in Nigeria shows that this constitutional provision has worked and is being used to deplete the resources of States.”

He explained, “Although Incorporated Trustees of Human Development Initiatives (HDI) & 39 ors v. Governor of Abia State & 73 ors and Barrister Bala James Nggilari v. Adamawa State Government acknowledged the constitutionality of State Pension Laws made pursuant to section 124(5) of the 1999 Constitution, Incorporated Trustees of Human Development Initiatives (HDI) & 39 ors v. Governor of Abia State & 73 ors showed that the answer was any of two options: the repeal of section 124(5) of the 1999 Constitution or the citizenry impressing on State Houses of Assembly not to pass any Pension Act pursuant to the said section 124(5), or if passed, the repeal of such Pension Law.

“This was the case where the Governor of Abia State in March 2024 signed the Abia State of Nigeria Governors and Deputy Governors Pension Repeal Law of 2024, which was passed by the State House of Assembly.”

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