TUC threatens strike over alleged amendment to PENCOM guidelines

Hyginus Chika Onuegbu

Hyginus Chika Onuegbu

THE Rivers State chapter of Trade Union Congress (TUC) has threatened to embark on protest if the rules guiding the operations of PENCOM are altered without recourse to the National Assembly and other stakeholders.

According to State Chairman, TUC Rivers State, Hyginus Chika Onuegbu, any amendment to the guidelines without the input of the National Assembly representatives of workers would amount to not only “illegal and vexatious but tantamount to the usurpation of the legislative powers of the National Assembly”.

He said the new guideline proposed by PENCOM amounts to unilateral usurpation of the powers of the National Assembly and changing the rules of a game in the middle of the game
Onuegbu said: “We will Shutdown if PENCOM Changes Rules on Voluntary Contribution Withdrawal Unilaterally and without recourse to the National Assembly”.

In a statement, Onuegbu added: “The attention of the Trade Union Congress (TUC) Rivers State has been drawn to the fact that the National Pension Commission is about to issue a guideline for withdrawal of Voluntary Contribution (VC) from the Retirement Savings Account without due consultation with the workers and the Unions that represent them. Information reaching us indicates that the proposed guideline provides that: Any person making Voluntary Contributions to his/her RSA in addition to the statutory contributions made by him and his employer, may withdraw up to 20% of the balance standing in the Voluntary Contributions portion of the RSA, not more than once in every 4 years”.
The statement added: “Subsequent withdrawals, after the above, shall be based only on additional contributions made into the RSA after the last withdrawal”.

He explained that the balance of 80% after the above shall not be accessed until retirement, noting that, “En bloc withdrawal of the total Voluntary Contributions by an RSA holder is not permissible until retirement”.
Copies of the protest letter according to Onuegbu, has been forwarded to the Secretary to the Rivers State Government, the Commissioner of Police Rivers State, the State Director, State Security Service (SSS), the State Controller, Federal Ministry of Labour and the Chairmen/Secretaries of all TUC affiliates in Rivers State

He argued that the alleged amendment is not only a “significant change to the current practice but clearly at variance with the spirit and intent of Section 10(4) of the 2014 Pension Reform Act which allows withdrawals at any time from the additional Voluntary contribution made under section 4(3) of the Pension Reform Act 2014”.

Explaining further, he said: “More so, limitless number and amount of withdrawals from the Voluntary Contribution (VC) has been the practice since the commencement of the 2004 Pension Reform Act. It is the basis upon which many workers made Voluntary Contributions to the Pension Scheme since 2004 to date. It is therefore shocking that PENCOM will contemplate to make this major change without recourse to the due process of law and without engaging the workers and the Unions that represent them.

This new guideline proposed by PENCOM therefore amounts to unilateral usurpation of the powers of the National Assembly and changing the rules of a game in the middle of the game.
“For the avoidance of doubt since the 2004 Pension Reform Act was commenced voluntary contributions have always been withdrawn anytime the contributor elects to do so and there is no limit to the number of times the withdrawal could be made, however voluntary withdrawal made before 5 years of their contribution was subjected to tax. With effect from July 2014, the 2014 Pension Reform Act removed the tax on Voluntary Contribution withdrawal amount. Section 10 (4) of the 2014 Pension Reform Act subjects only the income earned on the Voluntary Contribution to tax at the point of withdrawal.

It is important to recall that on 01 July 2014, following the passage of the Pension Reform Bill by the National Assembly, the then President Goodluck Jonathan signed the Pension Reform Act (PRA) 2014 into law and effectively repealed the Pension Reform Act 2004.
The 2014 Act is the extant law that governs and regulates the administration of the Contributory Pension Scheme for both the public and private sectors in Nigeria.

We are therefore worried that PENCOM which is a body created by the law would surreptitiously amend the law without recourse to the National Assembly and without engaging the Stakeholders. The action of PENCOM is not only illegal and vexatious, but also tantamount to the usurpation of the legislative powers of the National Assembly, as the guidelines will effectively change the spirit and intent of an Act of National Assembly through the backdoor.

We want to request all labour Unions in Nigeria to resist this illegal move by PENCOM. For us in TUC Rivers State, we will commence the process of shutting down the economy of Rivers state (without any notice or ultimatum) if PENCOM goes ahead with these illegal changes in the proposed guidelines without due engagement of the Trade Unions and the workers they represent, and without the due process of law in a constitutional democracy”.



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