Of CPS and Violation of Legislative Procedures
The passage of a bill by the two chambers of the National Assembly for an act to exempt its service personnel from the Contributory Pension Scheme has been greeted with negative reactions from pension stakeholders, writes Ebere Nwoji
Recent passage of a bill by the National Assembly for an act to amend the Pension Reform Act, 2014, to exclude/exempt the National Assembly Service personnel from the Contributory Pension Scheme (CPS) and establish what the law makers tagged, “National Assembly Service Pension Board,” has generated a lot of misgivings by Nigerians especially stakeholders in CPS who described the development as mockery of the legislative process.
The said bill seeks for an act that will exempt the lawmakers and their employees from the CPS, which has been in practice in Nigeria for the last 18 years.
The bill seeks to amend the Pension Reform Act 2014 to exclude/exempt staff of the National Assembly Service Commission from the Contributory Pension Scheme (CPS) and establish the National Assembly Service Pension Board; and for related matters.
It provides that the board shall be charged with responsibility of managing payment of pensions and gratuities to all personnel of the Service. The bill shall apply to all personnel of the National Assembly Service including those who had retired before the commencement of the bill. It provides that the retirement benefits of the personnel shall be adjusted to be commensurate with the provisions of the bill. They shall be charged on and paid out of the Consolidated Revenue Fund of the Federation, all such sums of money as may, from time to time, be granted by the federal government by way of pension and gratuity in accordance with the bill.
The 2004 Act establishing the CPS listed some categories of Nigerian workers that have been exempted from the CPS mainly due to the peculiarity of their work nature. It was this same lawmakers who in 2014 amended the 2004 Act during which it among other things exempted the armed forces intelligence from the CPS.
Since then, workers from some sectors have been agitating for exemption from the CPS for their various reasons but have not been permitted.
For instance, the university workers who have been agitating for this through the ASUU were not granted to be exempted rather they were allowed to establish their separate pension company the National University Pension Company (NIPENCO), which is still under the CPS. The police was allowed to open Police Pension fund administrator under the CPS.
However, airways workers have long been agitating for exemption but this has not been granted.
The latest was this National Assembly, which did not agitate long before going ahead to pass a bill that will usher in an act for amendment of Pension act that will exempt them from the CPS.
The bill has already been silently passed without passing through public hearing or allowing stakeholders to make their contributions.
In a swift reaction to this, pension stakeholders have questioned the rationale behind this hasty and silent passage of the bill.
PenOp Position
Reacting to the passage of the bill, the Pension Operators Association of Nigeria (PenOp), said: “this bill sets a dangerous precedent that will not augur well for hardworking Nigerians, working across the private and public sector, who depend on the Contributory Pension Scheme (CPS) for retirement security and stability. The introduction of the CPS in Nigeria marked a departure from the unsustainable pension schemes the country had been operating in the past. “This scheme has brought transparency, international best practice and guaranteed peace of mind to millions of pensioners.
PenOp in the statement said it wishes to express grave concern regarding the way the bill was passed.
According to PenOp, the passage of the bill seems to have been unnecessarily expedited and shrouded in secrecy with very little engagement and input from critical stakeholders—as it was passed during the National Assembly’s recess.
PenOp said it was disturbing that the bill did not go through any public hearing, noting that a key component of the legislative process that allows stakeholders to have their voices and opinions heard for possible inclusion in the process was not done.
PenOp said if this was done, pertinent issues such as the amendment of retirement age, funding of pension liability, and the potential debt burden on government all of which were affected by this bill would have been debated and brought to the fore.
“The National Assembly prides itself as the heart of our democracy. Indeed, the halls of the National Assembly are the people’s halls. As such, it is extremely important that the legislative authority the National Assembly wields is in no way subverted to serve vested interests in passing anti-people legislation, ”PenOp stated.
It noted that the exemption of any agency or group from the Contributory Pension Scheme (CPS) held grave consequences for the Nation’s struggling fiscal position and would potentially upend the retirement security of pensioners who have given their blood and sweat in service to our great Nation.
Describing the passage of the bill a procedural anomaly and legislative immorality, PenOp called on all well-meaning Nigerians to note the grave anomaly and call the lawmakers to order.
Also speaking Barrister Ivo Takor, a legal practitioner and consultant National Institute for policy and strategic studies Kuru, Jos, described the Passing of the bill which was sponsored by Olododo Cook Chairman of the House of Representatives Committee on National Planning and Economic Development as a mockery of the legislative process and smacks of impunity as well as arrogance in law making by the leadership and members of the current National Assembly.
He quoted Section 4 of the 1999 Constitution, which provides that the legislative powers of the Federal Republic of Nigeria shall be vested in the National Assembly, which consists of the Senate and the House of Representative.
He said Section 58(1) provides that the power of the National Assembly to make laws shall be exercised by bills passed by both the Senate and the House of Representative and, except as otherwise provided by subsection (5) of this section, assented to by the President.
He said in present times laws (acts of legislative bodies, statutes) are considered the main source of almost all national legal systems adding that is why the elaboration of this acts was important for the state, society, and all social and political groups.
“The strengthening of the position of the acts of legislative bodies is in democratic character in the procedure of adoption. In the acts of the legislative bodies, the people’s will is transferred to the will of the state. They are the results of a certain political compromise of different social and political interests. For the reaching of a compromise the special legislative process is established. It is open for public, mass media, so it is under social control, commonly referred to as public hearing.
He said stakeholders in the pension industry as well as members of the public are critical that contrary to established procedures and conventions, the bill under reference was passed by the National Assembly without the holding a public hearing on the bill by any of the Chambers.
He insisted that a bill is carried forward through all the stages of the legislative process by a long chain of standardised motions, which must be adopted by the house before the bill become law. According to him, the House does not commit itself conclusively in favour of a bill until the final stage, when it takes a decision to let the bill pass from the House or not.
Against this backdrop Takor, said the leadership of both Chambers of the National Assembly, the Senate and the House of Representatives owe the public, who they represent, an explanation as to why they avoided holding a public hearing on this particular bill.
He said to circumvent laid down process in law making as happened with the bill was a mockery of the legislative process and smacks of impunity as well as arrogance in law making by the leadership and members of the current National Assembly.
According to him, Public hearing helps in the evaluation of previous undertakings or decisions taken on the subject matter.
“If a public hearing was held on the bill, the House Committee concerned and indeed the House of Representatives, would have been able to activate the various interest groups, which include the Federal Government, the National Pension Commission (PenCom), Pension Fund Operators (PenOp), the labour movement (Nigeria Labour Congress and the Trade Union Congress), Civil Societies Organisations and other interested members of the public who would have averted them from embarking on a mission towards self destruction.
He submitted that it was the fear of hearing from these organisations and associations that was the principal reason why they skipped public hearing in the process of passing the bill.
He noted that in 2017, Olawole Oke, sponsored a bill, which sort to amend the Pension Reform Act 2014, to exempt the Nigeria Police Force (NPF) Nigerian Prison Services (NPS), Nigerian Immigration Services (NIS), the Nigerian Security Civil Defense Corps (NSCDC) and the Economic and Financial Crimes Commission (EFCC) from the CPS. At a public hearing organised on the bill, but that during the public hearing, stakeholders in the pension industry spoke against the bill and that was the end.
Again he recalled that on Tuesday 22nd February 2022 the House of Representatives Committee on Pension held a public hearing on two bills all seeking to amend the Pension Reform Act 2014. “The first bill, was “A bill for an Act to amend the Pension Reform Act 2014 to provide for the exemption of the Nigerian Police Force from the Contributory Pension Scheme and for related matters [HB. 1578] sponsored by Hon. Francis Ejiroghene Waive.
“There have been several other attempts aimed at exempting certain categories of public sector workers from the CPS through private members bills, which have failed as a result of the positions taken by critical stakeholders in the pension industry including the federal government position on the matter. The passing of the current bill is an indication that the current House of Representatives lack institutional memory, or is not diligent in the law making process or members are beclouded by pecuniary interest as it is being alleged by members of the public”.
He posited that the federal government was already overburdened with the payment of pensions under the unsustainable defined benefits scheme as illustrated in the 2022 Appropriation Act.
“Under the Service Wide Vote, the sum of N577.3 billion was made as total allocation for Pension and Gratuities. Pension allocation under defined benefits scheme for military and other security agencies represent 45.5 percent of the total proposed allocations for pension and gratuity. Meanwhile, only N125 billion was proposed for payment of accrued rights under the CPS for the 2022 prospective retirees of federal government treasury funded Ministries, Departments and Agencies (MDAs).
Querying the benefit of wasting legislative time and resources in passing a bill that the legislators themselves were afraid to follow its own due process, Takor said it was obvious even to them that it will not be assented by the President.
Other stakeholders’ View
When contacted, actuarial Scientist and Chartered Insurer, Dr Pius Apere described the bill passage by the National Assembly as creating lack of confidence in their own law, which they amended eight years ago. He said when they amended the 2004 law; they stated persons to be exempted from the CPS forgetting their staff.
He said this is lack of confidence because then, they exempted the arm forces but did not exempt their own staff.
He said just eight years after passing a bill for amendment; they are calling for another amendment.
Describing the bill passage as an after thought he said it is uncalled for.
Secondly he said by passing the law, the National Assembly has opened doors for other government agencies and parastatals to begin to agitate for their own exemption .He added that when they begin to ask for exemption, the law makers would have no moral justification to deny them that.
Thirdly, Apere said concerning the new board they want to establish, no body knows how they want to operate it.Do they want to go back to the old scheme. He noted that if that is what they want to do, they don’t need a separate board.
Rather, he said they need to be more explicit to the public.Again he said the manner of passage was very suspicion as there was nothing like public hearing or debate .
Finally, he queried what would happen to their contributed funds under CPS. “Would they want to leave the already contributed money which was from both the employer and employee? If they are paying to the old scheme the contributions, which is in two parts are they ready to forefeet because the employers will not give the contributions to them.
In his conclusion, he said by passing the bill the lawmakers do not mean good to the CPS.
He said they should go back to the drawing board and have a rethink on the bill and the Act they are pushing for.
Director General Lagos State Pension Commission (LASPEC), Mrs Folashade Onanuga, former said the bill and what the law makers were seeking to achieve through the bill was unnecessary because they amended the law just eight years ago. She said the whole thing boiled down to selfish interest lamenting that if it sales through, it was capable of scattering the CPS which is the only hope of an average Nigerian worker.
She advised the lawmakers to have a rethink and withdraw the bill because it would not be in the best interest of Nigerian pension system.
She said by establishing the so called pension board, the law makers were trying to take workers back to the old Defined Benefit system which though looks more profitable does not protect the interest of generality of Nigerian workers.
