Dont Borrow From Pension Fund – Labour Warns FG

Dont Borrow From Pension Fund – Labour Warns FG

The Nigeria Labour Congress, the President, Institute of Productivity and Business Innovation Management, Mr. Remi Dairo; and the President, Committee for the Defence of Human Rights, Malachy Ugwummadu, have kicked against the plan of the Federal Government to borrow from the N5.8tn pension fund.

Also, the President, Nigeria Voters Assembly, Mr. Mashood Erubami, noted that the pension fund could not just be spent by the government without following due process.

There have been reports that the Federal Government is perfecting plans to borrow from the huge workers pension fund to, among other things, develop the nation’s decaying infrastructure.

Others have also reasoned that the fund could be used to get the country out of the current economic recession.

The NLC, however, warned the Federal Government against tampering with the stipulated investment guidelines for the N5.8tn pension fund, contributed by workers in the country under the contributory pension scheme.

The General Secretary of the NLC, Dr. Peter Ozo-Eson, told one of our correspondents on the telephone on Thursday that any revision of the investment guidelines for the utilisation of the fund must involve all critical stakeholders.

He said the fund should not be tampered with as it was contributed by workers for their retirement.

The NLC secretary stressed that the guidelines for the utilisation of the fund were carefully designed from the beginning to prevent the fund from abuse.

He argued that the stipulated guidelines for the investment of the fund did not include the new areas being suggested and should be subjected to discussions by the stakeholders for any area to be accommodated.

He said, “We have stated our position that the security of those contributions is paramount because these are actually individual workers’ savings for retirement. So while government is focusing on the huge accumulated sum, the importance needs to be underscored that the security of those contributions is paramount.

“That is why the guidelines for the utilisation of investment of those funds were carefully worked out right from the beginning. And those guidelines for investment indicate what proportion can be invested in various areas, in the stock market, in government securities, in bonds, and all that. We believe that those guidelines need to be respected and all that.

“If there is a need to revive those guidelines to enable more of those funds to be used to finance specific sectors, then there is a need for talks among the stakeholders on those guidelines. Until that is done, we are opposed to any attempt to deviate from the existing investment guidelines.

“This is because these are people’s savings and they must not be endangered by sudden utilisation that does not derive from a well constructed investment guideline.”

Dairo opposed the move by the Federal Government to utilise the pension fund, saying it was not fair to the workers, who had saved their hard-earned money for their retirement.

According to him, the present situation, in which retirees are not paid at the right time, will persist if the government should start spending pension fund.

The IPBIM president added, “I will not support it because these people have worked for it. The pensioners are not paid at the right time. Many pensioners are complaining and the government wants to borrow the money. I will not be a part of such because it is wickedness.”

Ugwummadu, a lawyer, described the proposal as illegal.

He stated, “That will be very unfortunate and illegal. By law, pension contributions are monies already earned by pensioners but kept and administered by pension administrators. Many of the unfortunate pensioners are dying on a daily basis across the country owing to their inability to access their funds.

“This will be aggravated once the fund itself is tempared with illegally. The FG must deal with very many other sources of raising funds, including cutting cost of governance.’’

Erubami, in his reaction, believed the pension fund could not just be planned for spending without any legal framework.

He said, “The pension fund cannot just be planned for spending by the Federal Government, it is free money that can be appropriated without going through due process. However, it can be made available to the Federal Government if requested, but due process has to be followed.

“In the first instance, the pension fund cannot be left idle as it is a good source for lending on a long term basis.

“It could be used for the building of industries, develop tourism and make heavy investment, generate employment and sustainable human development.

“Another ‘loanable’ fund, like the pension fund, is the pool of unclaimed dividends. All these can be made available to government on request, if due process is followed.”