What does the enabling legislation that informs the investment choices of Pencom's investment managers say about the utilization of pension contributions? A proper reading and interpretation of the law is necessary if a meaningful conversation on the use or misuse of the funds' monies is to be had. Does the law say pension contributions may be used to finance infrastructure development and not recurrent expenditure for example? If it does not, Governor Oshiomhole may yet again be grandstanding. He carries on as a labor leader when in fact he is a partisan politician. If it does, what is the Governor's point?
The larger issue for me, is that worker contributions deposited in pension funds, are no longer recognized in Nigeria for what they really are- workers' deferred wages. They used to be. It has become generally accepted that Nigerians may retire and their retirement benefits including pensions may not and never be paid. Nigerians who can in anticipation of this disappointment, collect their "retirement benefits" upfront in a manner of speaking- steal from their employers and those they are paid to serve through corrupt practices.
How many Nigerian pension funds, contributory or not, are fully paid up? How many have proper periodic accounting and audit? How many of their managers are qualified professionals? How many of these managers are properly supervised and held accountable? Pension funds have mostly become slush funds in practice within government and outside it. Appointments to work positions in them in many cases, have become grace-and-favor anointments.
Pension fund management is serious business. Pension funds are part of society's safety net. People pay into the funds in their working years in the hope that their contributions and any return earned, will together help to pay for their and their families' upkeep in retirement. They should be secure, actually as ring-fenced as possible in law, and their proper management closely and timely supervised. Pension fund managers are fiduciaries. They should be qualified technically and ethically. They should be properly sanctioned and duly punished when they do not live up to their responsibilities.
Some on this Forum may remember the serious conversations that were had,when the President George Bush Administration proposed the investment of part of the social security fund in the stock market. The proposal failed because stock market investments were rightly considered by many, to be too risky- highly uncertain return, and therefore generally unworthy of funds held in trust by the state for citizens. It was not enough that the state could always underwrite any losses that may occur by the use of its taxing and money creation powers.
oa
From: usaafricadialogue@googlegroups.com [mailto:usaafricadialogue@googlegroups.com] On Behalf Of Mobolaji Aluko
Sent: Thursday, October 08, 2015 3:09 AM
To: africanworldforum@googlegroups.com
Cc: OmoOdua; Segun Sanni therealsegun@yahoo.com [NaijaPolitics]; NAIJA Dream Team Intellectuals; AfricanWorldForum; Yan; Ra'ayi Riga; USAAfrica Dialogue; nigerianid@yahoogroups.com; ekiti ekitigroups
Subject: USA Africa Dialogue Series - On the Matter of Investing PENCOM Funds for National Development {Re: Jonathan spent N3.5tn pension fund on recurrent expenditure – Oshiomhole
My People:
Here is what Oshiomhole is quoted to have said:
QUOTE
You challenge Pencom and Ministry of Finance, you will discover that over N3.5tn was drawn by the previous government from pension funds to support recurrent expenditure, not to support infrastructure.
UNQUOTE
Assuming he was quoted correctly - no embellishment or fabrication - there are two issues here:
1. First is the very character of MISAPPROPRIATION. If that is what Oshiomhole is hinting at, then misappropriation/misapplication means not spending a particular money the way it was meant to be spent, sometimes by the person who has custody of the money, who may do it under the influence of another person. I am not sure that is what Oshiomhole is stating here. It is therefore trite to say that something CANNOT happen, when in fact the very POSSIBILITY/REALITY of its happening is the ILLEGALITY being hinted at.
2. Secondly, and more importantly, is to ask certain questions:
(1) Was N3.5 trn drawn from PENCOM during this period?
(2) How much of it was invested in INFRASTRUCTURE?
(3) Is there ANY other CAPITAL category OUTSIDE of Infrastructure that PENCOM spent part of the money on?
If NONE was invested in Infrastructure or any other Capital Project - as Oshiomhole is likely to be hinting - then the ONLY other category that PENCOM must have spent the money on would be RECURRENT - to pay for
(A) its (PENCOM) own workers (salaries + allowances)
(B) to pay for its own overhead operations
(C) to pay for retirees - its primary aim.
I believe that is what Oshimhole is hinting at - that the N3.5 trn was not INVESTED to generate more money - maybe beyond interest income from banks - and was used to do (A), (B), (C) above, rather than to include
(D) Investment in Infrastructure (Roads, Railway, Power, Water), for which citizens will be required to pay
(E) Low-Interest Loans for Education
(F) Low-Interest Loan for Agriculture
(G) Low-Interest Loans for Manufacturing Industries
(H) Conservative Investment in Foreign Securities
A successful investment in these will not only DEVELOP the country, but a portion of the return on investments will be ADDED to the income of the retirees via (D) to (G) above.
That is what is done all the world over - except in Nigeria apparently - out of fear of corruption? We must rise above that, and be confident that we can put the proper controls.
In conclusion, I fully support the conservative use of the trillions of PENCOM in developing our country. Not doing so is ridiculous, and is like that story of the Bible where one man was given a talent and he BURIED it and returned it to its owner who upbraided him, while the others invested theirs, and where given even more money.
And there you have it.
Bolaji Aluko
On Wed, Oct 7, 2015 at 10:42 PM, 'Leye Ige' via AfricanWorldForum <africanworldforum@googlegroups.com> wrote:
"The funds are held by one independent institution while the investment decisions are made by a different private sector entity. All regulated by PENCOM..No Government can use pension funds as before because the funds neither belong to Govt nor controlled by Govt."--Joe Attueyi
(1) The funds need NOT belong to or be controlled by the Government BEFORE the government can access it. The Government appoints whoever will be the directors of PENCOM and associated entities.
(2) The government does NOT have to "use it as before"; that is, simply dipping its hands into it; BUT the government can utilize it via "Investments"--which is what Pension funds are all about-- just that in this case, the "investment" is in recurrent expenditure.
Leye Ige
--------------------------------------------
On Wed, 10/7/15, Joe Attueyi topcrestt@yahoo.com [OmoOdua] <OmoOdua@yahoogroups.com> wrote:
Subject: [OmoOdua] Re: [NIgerianWorldForum] Re: Jonathan spent N3.5tn pension fund on recurrent expenditure – Oshiomhole
To: OmoOdua@yahoogroups.com
Cc: OmoOdua@yahoogroups.com, "Segun Sanni therealsegun@yahoo.com [NaijaPolitics]" <NaijaPolitics@yahoogroups.com>, "Oyo State Intellectual Forum" <Oyo-forum@yahoogroups.com>, "NAIJA Dream Team Intellectuals" <naijadreamteamintellectuals@yahoogroups.com>, "Buddies" <Caucusmen@yahoogroups.com>, "Ode- Besilu's Group" <NaijaObserver@yahoogroups.com>, "AfricanWorldForum" <AfricanWorldForum@yahoogroups.com>, "Naija News" <TalkNigeria@yahoogroups.com>, "yahoogroups" <Egbeodua@yahoogroups.com>, "Unilorin friends" <Universityofilorinalum@yahoogroups.com>, "Yan" <YanArewa@yahoogroups.com>, "Professionals" <capitalmarketroundtable@yahoogroups.com>, "Ra'ayi Riga" <raayiriga@yahoogroups.com>, "NaijaEvent@googlegroups.com" <NaijaEvent@googlegroups.com>, "African GM" <africanworldforum@googlegroups.com>
Date: Wednesday, October 7, 2015, 12:29 PM
Post Adeola commission restructuring of
the pension system:
the pension
funds contributed
under the auspices of
the National Pension Commission
(PenCom) are
managed by privately owned Pension Fund
Administrators (PFAs) and kept in custody by
Pension Fund
Custodians
(PFCs).
as Segun
rightly educated those who are interested in knowing how the
pension system currently works in Nigeria. The funds are
held by one independent institution while the investment
decisions are made by a different private sector entity. All
regulated by PENCOM.
No Government can use
pension funds as before because the funds neither belong to
Govt nor controlled by Govt.
Some state governments
have not adopted these pension reforms. Edo is probably one
of them -- which would explain Oshio's
confusion
Joe
Sent from my iPhone
On Oct 7, 2015, at 4:48 PM, Leye Ige ige.leye@yahoo.com
[NIgerianWorldForum] <NIgerianWorldForum@yahoogroups.com>
wrote:
the pension funds contributed
under the auspices of the National Pension Commission
(PenCom) are managed by privately owned Pension Fund
Administrators (PFAs) and kept in custody by Pension
Fund
Custodians (PFCs).
__._,_.___
Posted by: Joe Attueyi <topcrestt@yahoo.com>
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