TheCable

The Nigeria Union of Petroleum and Natural Gas Workers and the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) has embarked on industrial strike today after they failed to reach an agreement with the management of the Nigerian National Petroleum Corporation (NNPC) over cancellation of the in-house pension fund management system.

The union had threatened that if its needs were not met by 12 Midnight on Monday, it would shutdown all operations of the NNPC.

PENGASSAN workers are agitating over the sudden withdrawal of the operational license issued to the NNPC by the Pension Commission (PenCom) to run an in-house pension fund management company for its workers.

They also claimed that the management of the NNPC had refused to fund contributions to the scheme.

The union therefore wants NNPC to approve the pension scheme and its adequate funding, restore crude supply to the refineries and ensure a Turn Around Maintenance (TAM) of the refineries.

In July 2006, PenCom issued a temporary approval for NNPC Pension Fund to operate as a Close Pension Fund Administrator (CPFA), pending compliance of guidelines issued by the commission and the provision of the PRA 2004.

A letter issued to the NNPC Pension Fund Limited by the Acting Director General of PenCom, Chinelo Anohu-Amazu, dated September 8, 2014, however pointed out that NNPC failed to meet up with the pending provisions as cited in Section 50 (1) (g) of the PRA and clause (b) (i) of the approval conditions which provides that the scheme shall be fully funded at all times and that any shortfall shall be made up within 90 days.

According to PenCom, NNPC violated Clause (b) (ii) which provides that the funds and assets of the scheme shall be passed to license Pension Fund Administrators (PFAs) of NNPC’s choice for management. NNPC did not transfer all funds and assets to any licensed PFA for management, in contravention of the Act, PenCom said.

The commission explained that the NNPC failed to transfer real estate properties on the pretext that the PFAs were not adequately equipped for the real estate management. It also accused it of failing to transfer all pension fund assets to the custodian, provide any undertaking to the commission since the approval of the scheme in July 2006 as well as the evidence that employer and employee pension contributions were being remitted to the licensed operators as required by the Act.

Meanwhile, a statement issued by NNPC Group General Manager, Group Public Affairs Manager, Ohi Alegbe, on Monday acknowledged the existence of some funding gaps in the scheme but said measures had since been put in place to steadily bridge the funding deficit which stood at N298 billion in 2010 and had now been provisionally reduced to N85 billion as at June, 2014.

Alegbe said the company is in the process of transferring additional real estate property valued at several billions of naira to the scheme which is currently before the NNPC board for approval.

According to him, the PENCOM in a fresh directive dated September 15 granted the NNPC a transition period of 12 months to ensure full compliance with the provisions of the PRA 2014.

The company assures that it is taking necessary measures to avert the strike.