There were strong indications Monday that the Economic and Financial Crimes Commission (EFCC) is about to swoop on the management of the Power Holding Company of Nigeria (PHCN) and the leadership of the three trade unions in the state-owned electricity utility over N200 billion reported to be missing from the pension funds. thisdaynews reports
According to sources, the attention of the anti-corruption agency was attracted to the missing funds following claims that 25 per cent of workers’ salaries deducted over the years could not be accounted for.
President of the Senior Staff Association of Electricity and Allied Companies, Bede Opara, and the General Secretary of the National Union of Electricity Employees, Joe Ajaero, had up till Monday claimed that the deductions were made and the monies remitted to the appropriate authorities.
In 2004, when the new Pension Reformed Act came into force requiring public sector employees to open accounts with pension fund administrators, N88 billion contributed by the 47,000 PHCN workforce was thought to be in the pension scheme, but only a paltry N3 billion has been accounted for to date.
The poor state of the scheme was a closely guarded secret by the PHCN management and trade unions, but was blown open last week when external auditors working with the Bureau of Public Enterprises (BPE) on how to raise funds for the payment of PHCN employees’ severance package stumbled upon the startling revelation.
“In spite of the dangerously poor funding of the superannuation,” observed Chidi Nwachukwu, a lawyer and managing partner of Diva Consulting, an Abuja-based firm which specialises in human capital development, “The PHCN has been able to pay heavy retirement benefits to its top employees, especially the directors who receive about N22 million gratuity and N600,000 monthly pension each.” The utility has every year set aside N300 million for the settlement of retirements.
Nwachukwu, who also runs the Centre for Environmental Management in Africa (CEMA), explained that the PHCN could pay the huge benefits because its workers have been retiring individually, but with the impending mass retirements in the wake of the privatisation of 17 PHCN successor companies, “the systemic rot could not be hidden any longer.”
PHCN has been operating an in-house defined pension scheme, with only the management and leaders of the trade unions as trustees.
Its insistence on continuing with the scheme has been rejected by the Federal Ministry of Justice, citing the Pension Reform Act.
Also its attempt to start a closed pension scheme like the Shell Petroleum Development Company was turned down by the Pension Commission (PenCom), which said that PHCN’s failure to fund its pension scheme disqualified it from obtaining the licence, noting that the N3 billion in its kitty was a far cry from at least N88 billion it requires to start.