Removal of PenCom Management Team, Intrigues and Legal Questions

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 Iyobosa Uwugiaren highlights the legal implications of the recent removal of PenCom’s management team by the federal government

The seeming recent political and ethnic scheming that led to the removal of the Director General of the National Pension Commission (PenCom), Mrs. Chinelo Anohu-Amazu by President Muhammadu Buhari has continued to produce huge controversy among critical stakeholders in the pension funds administrators (PFA).

The president, last week, announced Alhaji Aliyu Abdulrrahman Dikko as a replacement for Mrs. Anohu-Amazu along with other new management team including Chairman and commissioners.

However, the letters informing Anohu-Amazu and her colleagues—commissioners of their removal were not delivered until Friday April 21, 2017 at about 5pm—-over a week after the announcement on the media.

The manoeuvrings swelled as a result of the disagreement over the alleged raiding of the commission corporate headquarters in Abuja—same day by the State Security Services (SSS). THISDAY gathered that the security operatives had frisked personnel of the PenCom as they were exiting the commission’s headquarters.

A source at the commission said the workers were visibly irked by the security measures, which they felt were uncalled for. But SSS said that the measures were aimed at ensuring that no official document was taken away.

However, some of the staff members held the view that the raid might have been instigated by ‘’powerful people on whose toes’’ the former DG might have stepped on due to her ‘’uncompromising attitude on matters of transparency and due process.’’

It was gathered that upon hearing the news of her sack over the mass media, Anohu-Amazu had requested from the office of the Secretary to the Government of the Federation, a formal letter to that effect. The letter was however not received until Friday. A source said the former PenCom DG was in her office on until Friday evening.

But a senior SSS operative was quick to say that the agency did not conduct any raid on PenCom office. “What we did was to put a standby team at the office to prevent anybody from tampering or altering any document unlawfully or without due process”, the secret security agent stated.

“We had an intelligence information that some documents are being tampered with, some documents are being signed and back dated at the PenCom office following the announcement of a new management of the commission. And we are only being pro-active by ordering all officials there to stop forthwith any action on official documents pending when the new management will assume duty”, the agent added.

But debunking the secret security agency’s claim, a senior management staff of PenCom told THISDAY that the SSS acted illegally as there was no need for its action.

“You recalled the Presidency recently announced through the media that the Director-General and commissioners in the commission were removed. And they did not get official letters to that effect”, the source in PenCom stated.

“So, apparently in order to avoid being accused of negligence of duties, the sacked DG and the commissioners came to office last Friday; and they were there until they received their letters; and by 5pm – official closing hour, they left.

“But apparently acting on information from some vested interest that the sacked DG and her commissioners were still in the office, the SSS agents invaded the office few minutes after they left. It is idiotic for anybody or agency to think that vital documents were being tampered with; there was nothing like that,” the PenCom source added.

The removal of PenCom management team was part of the 22 other Heads of agencies removed. But only PenCom is a statutory agency of all the agencies and parastals dissolved—with Senate confirmation required for the management. In other words, the new team would have to wait for Senate’s confirmation before it resumes work.

The growing concern among some stakeholders stems from the seeming inappropriate action that informed the removal of the PenCom management team without regard to the Pension Reform Act (PRA) 2014. The sound argument is that their appointments were made via Senate’s confirmation for a fixed term, asking what then the value of such confirmation is.

In particular, the former DG was confirmed on September 30, 2014 for a five-year term, which is expected to end on September 29, 2019. The controversy is swelled by the fact that the replacement of the former DG is against Section 21 (2) of PRA 2014.

The Act says: ‘’In the event of a vacancy, the President shall appoint a replacement from the geo-political zone of the immediate past member who vacated the office to complete the remaining tenure.’’ The former DG is from South East zone. And the question is: why did the President appointed Dikko from the North to replace her?

There is also an all-encompassing legal argument that the appointment of the new DG runs contrary to Section 19 (5) of PRA 2014, which says that ‘’the chairman and members of the PenCom Board shall not own controlling shares in any of the pension funds administrator or pension funds custodian—-prior to or during their tenure of office as chairman or members of the board. Or be directors or shareholders in any pension funds administrator or pension funds custodian before the expiration of three years after ceasing to be a chairman or member of the board.”

THISDAY gathered that the new DG designate is currently a majority shareholder—-controlling over 60 per cent shares in the Premium Pension Limited, one of the fast growing pension funds administrators in the country today.

The new DG, Aliyu Dikko, was the pioneer Managing Director/Chief Executive Officer (MD/CEO) of Premium Pension Limited (PPL) until he retired in 2011, and was immediately elected as the Chairman, Board of Directors of the company.

Before becoming the MD/CEO of PPL, HE was the Chief Executive Officer of United Bank for Africa Plc (UBA) until May 10, 2005, when he voluntarily disengaged from the services of the bank to pursue private initiatives.

He has a first degree in Accounting from Ahmadu Bello University (ABU) Zaria and a Masters Degree in Finance from the University of Manchester, England.

Monitors of pension funds administrator who confided in THISDAY said that the removal of Anohu-Amazu would continue to ‘’generate heated debate and controversy, taking into consideration how she raised the standards of PFA’’—–in terms of regulation.

Anohu-Amazu served as the pioneer Secretary/Legal Adviser of the Pension Commission, before becoming the Director General in December 2014.

Her tenure as DG recorded a geometric rise in pension assets, which stood at N2.4 trillion in 2014 and was N6.5 trillion at the time of her exit from the commission recently.

Before then, she was a member of Pension Reform Committee of 2004 that introduced Contributory Pension Scheme in Nigeria.

The Act, which repealed the Pension Reform Act No.2, 2004, has continued to govern and regulate the administration of the uniform Contributory Pension Scheme (CPS) for both the public and private sectors in Nigeria.

The major highlights of the new Act, include: remitting contributions—–that an employer is under obligation to remit pension contributions to pension fund custodians within seven days after payment of salaries; otherwise, in addition to making the remittance, the employer shall be liable to a penalty which shall not be less than 2% of the total contributions that remain unpaid for each month or part of each month that the default continues.

The PRA 2014 has also revised the rate of pension contribution—-from 7.5% contributed equally by the employer and employee under the old law to 8% for the employee and 10% for the employer; bringing the minimum total contributions for both parties to 18% compared to 15% previously.

As contained in the 2004 Act, an employer may choose to make the total mandatory contributions without making deductions from the salary of the employee; however, total remittance for any employer who chooses to remit without recourse to the employee must not be less than 20% of the monthly emolument of the employee. Monthly emolument is defined to mean total emolument as contained in the employee’s contract of employment, but shall not be less than the total sum of basic salary, housing and transport allowance.

That contribution under the CPS shall form part of tax deductible expenses in the computation of tax payable by an employer or an employee under the relevant income tax law.

Any employee who disengages or is disengaged from employment and is unable to secure another job within four months (previously six months) of such disengagement may make withdrawals from his/her RSA in accordance with the Act. And where an employee transfers his/her employment from one employer to another, the same RSA shall continue to be maintained by the employee.

Under the Group Life of the Act, every employer must maintain a group life policy in favour of each employee for a minimum of three times the annual total emolument of the employee and, where the employer fails, refuses or omits to make payment for premiums as and when due, the employer shall make arrangement to effect payment of claims arising from the death of any staff in its employment during such period.

Unlike the old Act, which mandated proceeds of group life policy be paid into the RSA of a deceased employee, the 2014 Act mandates the insurance company to pay the life insurance proceeds to the named beneficiary in the policy. What this means is that employees must ensure that their HR records are accurately and consistently updated to reflect the appropriate beneficiaries at all times.

The former DG may have moved on with her life—-facing new challenges in her career, but it will remain on record that she introduced the World Pension Summit for Africa Special—a roundtable for pension supervisor and operators in Africa in Nigeria during her tenure.