NLC, Stakeholders Urge Govt to Safeguard Pension Assets from Economic Volatility

James Emejo in Abuja

The President, Nigeria Labour Congress (NLC), Mr. Joe Ajaero, alongside stakeholders in the pension industry, yesterday called on governments at all levels to shield workers’ pensions from economic vulnerabilities.
The NLC president also advocated for a more inclusive and worker-friendly pension system in order to attract more contributors rather than scare them away.
This was just as the President of Abuja Chamber of Commerce and Industry (ACCI), Dr. Al Mujtaba Abubakar, said the 2014 Pensions Reform Act had brought sanity to the industry and resulted in accelerated growth and boosted the confidence of the masses.

However, he pointed out that despite the progress, the industry spread remained below 20 per cent of the entire workforce which had excluded many workers from the benefits of the scheme.
According to him, the low penetration in the industry had excluded too many Nigerians from the scheme especially those in Small and Medium Enterprises (SMEs) sub-sector.

This, he said, implied that over 60 per cent of the workforce is in danger of not benefitting from the revitalised and reformed pension scheme.
Both Ajaero and Abubakar spoke at the pension industry roundtable with the theme: “Strategic Dialogue to Enhance Private Sector Participation in Pension Scheme,” which was organised by the National Policy Advocacy Centre of the Abuja Chamber of Commerce and Industry (ACCI) and the Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA) in collaboration with the National Pension Commission (PenCom).

Specifically, the NLC president, who was represented by the Assistant General Secretary (AGS), NLC, Mr. Onyeka Chris, said the pension assets should be protected from economic vagaries such as inflation and currency depreciation, giving an analogy that a worker or retiree who saved about N10 million in his or her retirement savings account 10 years ago, would probably have only N1 million as of today in terms of the real value of the savings.
He also said the inability of retirees to access their savings immediately upon retirement was a major disincentive for the contributory pension scheme (CPS) and urged the regulators to effect necessary amendments to make the programme further attractive.

He noted that the recent agitations by some workers to exit the scheme were informed by some of the anomalies noticed in the scheme.
Ajaero said, “The only thing we can say is that the pension system today as it is does not address completely or to a large extent, the fears of the Nigerian workers and that is the reality and that is why some of us have concluded that the pension scheme in Nigeria is parasitic.

“For example, a worker that has saved like N8 million in the last 10 years in his retirement savings account and suddenly with all the ‘buharinomics’ and ‘emilokanomics’, the value crashed, and something that would have been N8 million, he would have been a rich rice merchant owning a very big warehouse…and suddenly that guy can no longer purchase the same numbers of bags of rice…that N8 million in the last 10 years has crashed to probably N1 million.”
He said though the CPS had, “put money in your pockets, businesses and that is the reality – but it has not protected us. The value of what we are saving; how are we going to address it comprehensively?”
He said, “We must create a pensions system that has integrity; a pension system that would attract more and more people.”
He also said workers want to be able to spend their retirement benefits while alive, adding that the current policy limiting the amount that could be accessed at retirement was worrisome.

He added “I want to be able to use the money that I am saving or is it when I die?”
The NLC president, therefore, urged the gathering to explore “how we can make the pension system work for workers while they are alive.”
“We must also make the pension system attractive to people especially in the informal sector by protecting the pension fund itself,” he said.
The ACCI president noted that since the passing of the reformed pension act in 2014, the CPS had been implemented by only six states and the Federal Capital Territory (FCT).

He said, “This and many other gaps in the sector led to the lack of inclusiveness among many workers in the country.”
He said the roundtable was to raise awareness and map out practicable ways on strengthening the inclusiveness of the workforce in the pension scheme in the organised private sector within the FCT and the country at large.