Edun, Labour tango over pensions funds
There is a firm safeguard for pension funds which makes it impossible for anybody to tamper with them, the Federal Government has assured Nigerians.
“There are rules and well laid out limitations about what pension fund assets can be invested in and what it cannot be invested in,” Finance and Coordinating Minister of the Economy Mr Wale Edun said.
He added: “The Federal Government has no intention whatsoever to go beyond those prescribed limits, or outside those bounds, which are there to safeguard the pensions of workers.”
The comment drew the ire of some Nigerians.
In a letter to Edun, the NLC and TUC said his announcement had “ignited deep apprehension and unrest among workers”.
They added that “the revelation that the government has already accessed nearly 70 per cent of the entire pension fund value is not merely alarming but utterly unacceptable.’’
“Nigerian workers rightfully demand assurances that their retirement funds will not fall victim to further Federal Government borrowing, especially when the PENCOM Board has not been constituted as envisaged by the statutes.
Edu spoke against the backdrop of fears being raised in some political and Labour quarters that the Federal Government was interested in using the funds for infrastructure development.
Former Presidential candidate Atiku Abubakar, the Trade Union Congress (TUC) and the Nigeria Labour Congress (NLC) are among those making the claims.
Edun had after Tuesday’s marathon Federal Executive Council (FEC) meeting hinted at plans by the government to deploy about N20 trillion pension fund on infrastructure.
The comment drew the ire of some Nigerians.
The minister made the government’s position known on the pension funds, in a video posted yesterday.
He said: “It has come to my notice that stories are making the rounds that the Federal Government plans to illegally access the hard-earned savings and pension contributions of workers. Nothing could be further from the truth.
“The pension industry, like most of the financial industry, is highly regulated. There are rules and well laid out limitations about what pension fund assets can be invested in, and what it cannot be invested in.
“The Federal Government has no intention whatsoever to go beyond those prescribed limits, or outside those bounds, which are there to safeguard the pensions of workers.
“What was announced at the Federal Executive Council was merely for information purposes only. No approval was sought for any action whatsoever.
“The information was that there was an ongoing initiative, drawing in all the major stakeholders in the long-term savings industry – those that handle funds that are available over a long period – to see how, within the rules and regulations set by the law, that could be used maximally, most effectively, to drive investment in key growth areas including infrastructure, housing, and of course, to find a way to provide Nigerians with affordable mortgages.
“Within this context, there is no attempt, nor is it being considered to offer unsafe investments for pension funds or even insurance funds or any investment funds.
“No attempt whatsoever to increase the risk. No attempt whatsoever to lower the returns that would otherwise be earned.
“It is important to remember that the Federal Government possesses the ability to provide guarantees where stocks are needed in order to unlock funding that will lead to growth, creation of jobs, and alleviation of poverty.
‘’It is an ongoing conversation, a challenge, a test for the best and the brightest in the financial industry to come up with solutions that, while safeguarding the long-term savings, do provide an avenue that can help to boost growth in the economy.’’
especially considering the ambiguity surrounding previous borrowing practices?
“The lack of clarity on this matter only fuels scepticism regarding the feasibility and sustainability of your initiative.
“One is left to wonder which board superintends over such discussion with the government. Seeking to borrow from this fund is not backed by the Pension Act.
“Despite the government’s assurances of widespread consultation with major stakeholders in the pension industry, it is disheartening to note that the NLC and TUC, representing the owners of the entire pension fund contributions, have neither been consulted nor informed about the government’s intentions.
“This lack of transparency undermines the sanctity of pension funds, which should be treated with the utmost reverence and protection at all times.
“It is incumbent upon the government to prioritise alternative sources of funding that do not imperil the financial security of Nigerian workers.
“We insist that any initiative aimed at leveraging pension funds for national development must be executed with utmost transparency, accountability, and respect for the rights and interests of workers.
“Furthermore, we strongly oppose the notion of the government engaging in fierce competition with other users of funds in the Pension fund market.”
Jfworld 