National Petroleum Company Pension Fund Gets Ultimatum To Clear Arrears

The House of Representatives has mandated the Nigerian National Petroleum Company (NNPC) Pension Fund Limited to commence payment of all accumulated pensions and arrears due to retirees of the corporation (now company) within three months.

The House also asked its committee on Pensions to investigate the operational activities of the NNPC Pension Fund Limited; scrutinise the fund’s financial records, investment portfolios, and asset management practices, and recommend sanctions where evidence of negligence, fraud, or misappropriation is established.

This followed the adoption of amendments to a motion moved by the member representing Fagge Federal Constituency of Kano state, Muhammad Shehu at the plenary on Thursday.

Moving the motion, Shehu acknowledged the grievances of the retirees and contributors under the NNPC Pension Fund Limited, as well as the inappropriate operations, injustice, financial mismanagement, non-payment of entitlements, and gross negligence perpetrated by the fund’s management.

He explained that the NNPC Pension Fund Limited originated as a Trust Fund in 1983, to manage NNPC Pension Assets for the benefit of NNPC and the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) for retirees.

The lawmakers stated that following several reforms, the Trust Fund was incorporated as the Incorporated Trustees of NNPC Pension Fund in 1986 and later transformed into NNPC Pension Fund Limited (NPFL) after the enactment of the Pension Reform Act (PRA) of 2014.

Shehu expressed concern that “the objectives of the Pension Reform Act, 2014, are to establish a uniform set of rules, regulations, and standards for the administration and payment of retirement benefits across the Public Service of the Federation, and that the Retirement Savings Accounts (RSA) remain the only financial lifeline available to retirees upon retirement.

“Most NNPC retirees are unable to access retirement funds, despite fulfilling all statutory requirements under the Contributory Pension Scheme, causing widespread hardship, inequality, and disillusionment, as the management of NNPC Pension Fund Limited has consistently failed to comply with Court Orders directing payment of harmonised pensions to retirees, leaving the aged retirees to staged protests.”

He said credible reports and stakeholder submissions revealed that NNPC Pension Fund Limited violated the provisions of Section 50(1)(a) of the Pension Reform Act, 2014, as well as Clause (b) of the approval conditions, which “mandates that the scheme must be fully funded at all times and that any shortfall must be made up within 90 days.”

He recalled the allegations that the NNPC had failed to transfer all pension fund assets to the designated custodian or provide a statutory undertaking to the National Pension Commission (PenCom) since the scheme’s approval in July 2006.

He noted that “the inappropriate financial management, lack of transparency, and disregard for regulatory standards had eroded confidence in the integrity of the pension system within the NNPC.

“Many of the retirees, after decades of dedicated service to the nation, are presently battling with health and financial difficulties due to the inaction and negligence of those entrusted with their welfare.

“The current framework of the NNPC Pension Fund Limited is inconsistent with international best practices, and there is an urgent need for the Federal Government to adopt an International Standard Pension Fund Structure and Framework for sustainable investment, transparency, and accountability in pension management.”