Litigation on poor welfare and defaults in remunerations of staff members of some Pension Fund Administrators (PFAs) and other pension operators is becoming rampant in the pension industry, in spite of the regulatory oversight of PenCom, OMOBOLA TOLU-KUSIMO writes
On November 19, last year, the National Industrial Court in Ikoyi, Lagos, gave judgment against Radix Pension Managers Limited, a Pension Fund Administrators (PFA) licensed by the National Pension Commission (PenCom).
In the judgment, Justice R. H. Gwandu, granted the 14 reliefs brought before it by a former Managing Director of the pension fund administrator.
Findings at the industrial court revealed that the same PFA had over 11 cases brought against it by some workers, though the firm settled the claims out of court.
The litigation, brought by former staff members of IGI Pensions, the legacy PFA acquired by Radix Capital Partners, the major investors, also centered on its failure to honour severance agreements, after the new investors, Radix Capital Partners, had assured the National Pension Commission (PenCom) of its intention to pay within days of obtaining regulatory nod.
In another case, Justice Salisu Danjidda of the Lagos Judicial Division of the NIC declared the non-payment of Mr Adebayo Adesina’s salaries of between November and December 2018 and two weeks’ leave bonus by the Veritas Glanvills Pension as wrong.
The court ordered Veritas Glanvills Pension to pay Mr Adebayo N6,895,740 as salaries for the period and N1,705,260 as the outstanding two-week leave bonus and N200,000 costs.
A former staff member of IGI Pension, acquired by Radix Capital Partners, with similar unfortunate experience with Radix Pension, said though her severance pay was not up to N3million, she had to join her colleagues in seeking justice at the NIC after attempts at making the Radix Pension Board.
Justice came for her in staggered payments over five years after the Radix Capital Investors had assured PenCom of meeting the obligations.
These, and other staff issues in the industry, call for serious concerns, especially with the regulatory oversight of PenCom, which has received commendations over the past 18 years.
Unfortunately, issues of poor welfare, defaults in staff remunerations leading to litigation are becoming rampant and a menace in the industry.
A female staff member, who spoke on condition of anonymity, said it also calls to question PenCom’s regulatory oversight and operators’ rules of staff engagement, including maintaining corporate governance and integrity.
She said aside from the yearly routine examinations by PenCom, they also require operators to send in monthly activity reports that cover the fiduciary functions of the PFAs as well as staff matters, including any litigation.
She said: “In an industry that requires high level of trust and integrity, it is no surprise that PenCom takes the issues of staff fidelity very seriously, with the commission maintaining a list of erring staff members that have been blacklisted over the years. However, not much has been seen around sanctions against operators that deliberation renege on their agreements on staff remunerations and welfare; a situation that is becoming very rampant and disturbing in the industry. There are cases of employees that work for many years with nothing paid for years of unblemished service, by way of gratuity, in some PFAs.
“It is necessary to state that not all PFAs are guilty of this rather unfortunate development in an industry that is saddled with pension asset management and administration. Issues of staff welfare and remuneration go beyond contractual agreements on labour, they also serve as reward systems to encourage honesty in service.’’
A male staff member also said the Retirement Savings Account (RSA) holders’ choice of PFA centres primarily around trust, especially in customer service promises and delivery, and return on pension assets, as the safety of the funds is already guaranteed by the National Pension Commission through its efficient and effective systems.
“What isn’t seen as guaranteed is the way some operators, especially PFAs, treat issues of staff welfare, remuneration and severance pay.”
The law firm of renowned human rights lawyer, Femi Falana, SAN and Funmi Falana, SAN, represented the claimant in the referenced case here that lasted close to four years.
Mr. Taiwo Olawanle of the Falana Chambers, said efforts by them to settle the matter were rebuffed by Radix Pension Managers, compelling the claimant to approach the court. “The reluctance of the claimant, in this case, to pursue litigation must have been borne out of the belief that the PFA might be compelled by the regulator to honour its obligations.This is where the Legal Department at the National Pension Commission needs to develop guidelines around contractual obligations of operators in the industry.
“There should be a minimum standard, at the least. As stated earlier, staff welfare and remunerations are not just payments for labour, but a way of ensuring staff members do not engage in any fraudulent act, thus encouraging honesty and integrity in a highly sensitive financial sector. When staff members are shortchanged gleefully without regulatory interventions, unscrupulous characters with fraudulent tendencies get emboldened.
“Considering the objectives of the Contributory Pension Scheme (CPS), arguably one of the best policies by the Federal Government for its working-class citizens, PenCom needs to, as a matter of priority and urgency, develop guidelines that should govern issues such as this, in a most unambiguous manner, with very stiff penalties applied to any defaulting or erring operator. The regulator cannot afford to allow people without integrity to rubbish its commendable record as one the most effective and admired regulators in Nigeria.’’
Olawanle said they hoped this verdict of the NIC would serve as a veritable landmark that would see PenCom getting more involved in assessing staff matters and litigations among operators.
“PenCom must go beyond getting monthly reports on staff statistics and number of litigation pending against operators; it must develop a mechanism, as a matter of urgency, to check this disturbing trend in the industry, as it can cast a very dark shadow on the Commission’s outstanding records. The staff members that keep the wheels of the pension industry engine running must be protected by the National Pension Commission”.
PenCom spokesman, Ibrahim Buwai said PenCom conducts yearly onsite inspections of operators in addition to the monthly offsite reports submitted by them, so it’s doubtful if such cases will go unreported if at all they exist.
But another unnamed staff member said: “PFAs are meant to report cases. Yes, PenCom carry out routine annual examinations and monthly activity reports that include, “if there are any litigations. So, if an operator chooses not to report any litigation, how will PenCom know?
“Now, what does PenCom do with the reports on litigation when submitted? What level of intervention does PenCom apply? Before cases get to court, does the Commission have a ‘Dispute resolution’ mechanism with regards to staff contractual rights? “I can tell you that PenCom leaves workers to their fate. It was the former Director-General of PenCom, Mrs. Chinelo Anohu-Amazu, that was efficient in that regard. Probably because she is a lawyer.’’
