Union Picks Holes In Oil Workers’ Pension Administration

Oil workers under the aegis of the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) have raised concerns over inconsistencies and widening disparities in the administration of pension funds across the oil and gas sector.

Speaking yesterday at a summit in Abuja on “The Future of Pension in the Nigerian Oil and Gas Industry,” PENGASSAN President, Comrade Festus Osifo, stated that the union had observed significant lacunae in the management of closed pension fund schemes and called for urgent regulatory attention from the National Pension Commission (PenCom).

This is as PenCom unveiled a new initiative known as the Personal Pension Plan (PPP), aimed at expanding pension coverage to over 80 million Nigerians working in the informal sector.

The scheme, designed to deepen financial inclusion and promote retirement security, seeks to provide artisans, traders, farmers, freelancers, and other self-employed individuals with structured access to long-term savings and retirement benefits.

Speaking at the Annual Conference of the Pension Correspondents Association of Nigeria (PENCAN) in Abuja, the Director-General of PenCom, Ms Omolola Oloworaran reaffirmed the commission’s commitment to bridging the pension gap through innovation, technology, and inclusion.

Meanwhile, Osifo explained that while some oil companies had been magnanimous in adjusting pension payouts to reflect inflation and currency devaluation, the majority had failed to do so, leaving many retirees struggling with stagnant benefits that have lost real value over time.

He noted that this situation had created inequality among pensioners who retired under similar schemes but received differing levels of support depending on the discretion of their former employers.

He said that, despite the transition from 2004 to 2014 pension reforms, structural flaws persist in the older schemes, particularly in the actuarial assumptions that guide their sustainability.

Osifo noted that inaccurate projections, such as outdated life expectancy models, had created funding shortfalls that threatened the long-term solvency of some closed pension funds.

Although Osifo lauded PenCom for its professionalism and integrity, he urged the agency to maintain its standards.

“Many of our members who retired under the defined benefit system decades ago are now at the mercy of management decisions. We know what N200,000 could buy in 2010; today, it can hardly sustain anyone. Yet, in many organisations, their pension remains the same.

We have observed assumptions in actuarial valuations that no longer accurately reflect current realities. If you use a life expectancy of 76 instead of 80, for instance, you will end up underfunding the scheme. PenCom must take a closer look at these gaps to ensure that pensioners are adequately protected.

It is our duty to look after those who came before us. Tomorrow, we too will cross over and become pensioners. When we say ‘injury to one is injury to all,’ this is what we mean”, he said.

Osifo also revealed plans that PENGASSAN would embark on broad consultations with company managements and pension fund administrators to address the disparities in benefit adjustments and ensure that oil workers’ retirement welfare aligns with prevailing economic realities.