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From Adanna Nnamani, Abuja
The Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) has expressed deep concern over the poor growth of pensions and widening disparities in retirement benefits across the nation’s oil and gas industry.
The union said many retirees under the Closed Pension Fund Administrations (CPFAs) were trapped in a system that had failed to reflect current economic realities, leaving their pensions stagnant despite rising inflation and devaluation of the naira.
PENGASSAN President, Festus Osifo, who spoke at a one-day summit organised by the union in Abuja on Thursday, said the problem stemed from policy gaps in Nigeria’s pension system and inconsistent adjustments by oil companies operating CPFAs.
He explained that the 2004 Pension Reform Act introduced the contributory pension scheme while allowing some oil and gas firms to continue running the defined benefits model under CPFAs. However, the 2014 amendment to the law barred new employees from joining the defined benefits system, placing them under the contributory scheme.
According to him, while a few companies have mechanisms for regular pension growth, the majority still depend on management discretion, leaving retirees to face hardship as their fixed benefits lose value over time.
Osifo also criticised the way some companies calculate their pension funds and urged the National Pension Commission (PenCom) to tighten its monitoring of the process. He said the commission must ensure that pension funds remain adequate to cater for both current retirees and future beneficiaries.
The labour leader further disclosed that PENGASSAN would embark on sustained advocacy across the oil and gas sector to address identified gaps in pension management and improve the welfare of retirees.
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The union, he added, would engage management of CPFAs that fail to meet their obligations to ensure equity and fairness for pensioners.
He said: “Over time, we have realised that there is a serious gap in the system. In many organisations, people who retired several years ago still earn the same amount, even though the cost of living has skyrocketed.
“Only about 10 per cent of CPFAs review their pension benefits yearly, while nearly 90 per cent maintain static payments, depending solely on management discretion.
“PenCom must ensure that pension funds are sufficient to take care of today’s retirees and those that will join them in the future. We have observed gaps in how life expectancy and other variables are calculated, and these affect the overall fund balance.
“One of the institutions that have functioned excellently in Nigeria is PenCom. I pray they continue to maintain that high standard so that Nigeria will not happen to them.
“Those organisations doing what is right, we appreciate them. But for those that are not, we will engage them to make the lives of our pensioners more rewarding. It is our duty to take care of those who laboured before us because tomorrow we will also become pensioners.”
The summit, themed “The Future of Pension in the Nigerian Oil and Gas Industry,” brought together stakeholders, labour veterans, and pension administrators to review the sustainability of pension practices in the sector.
