Pension & Gratuity: Forfeiture is Executive Rascality, Unconstitutional — Activist Blasts Otti
A human rights activist and author, Comrade Paul Ikechukwu Njoku, has stated that Governor Alex Otti of Abia State is climbing a tree of impunity and executive rascality by telling Abia retirees to forfeit their arrears of pension and gratuity incurred by the past administrations.
Njoku stressed that such development is evil, wicked and unconstitutional, adding that the governor entered into a social contract and agreement when he campaigned and promised pensioners that he would clear all the arrears of pension and gratuity if elected as executive governor of Abia State.
This is coming after the governor has repeatedly said he would not pay the arrears of pension and gratuity incurred by his predecessors, insisting that his administration has entered into a written and signed agreement with the Abia State body of National Union of Pensioners to write-off the retrospective arrears.
In a statement made available to News Band on Tuesday, activist Paul stated that, “Governor Alex Otti has to take a second look at the issue of payment of arrears of pension and gratuity of retirees and rescind his evil, wicked and unconstitutional agreement he purportedly reached with the National Union of Pensioners.
“In my view, Alex Otti lacks human face and conscience. He is climbing a tree of impunity and executive rascality by telling Abia retirees to forfeit their arrears of pensions and gratuities incurred by the past administrations in the State. The money does not belong to him but to the pensioners who spent 35years of their lives working as civil servants in Abia State when he was working as a banker and earning his money and arrears of financial packages.
“Mandating and insulting our aged and sick veteran’s to forfeit their arrears of pension and gratuity is not only an executive rascality, impunity, evil and wicked but unconstitutional. Making mockery of pensioners and calling them “stupid”, “dishonest” and “ingrates” are uncivil remarks unbefitting of an executive governor of a state.
“Has governor Alex Otti forgotten that prior to the 2023 general elections, he entered into a social contract and agreement when he campaigned and promised pensioners that he would clear all the arrears of Pensions and gratuity if elected as executive governor of Abia State? Why has he reneged on that promise and re-sorted to insulting and embarrassing our senior citizens? Government is a continuum. If he cannot clear the arrears as promised, why can’t he keep quiet, pay the little he can and leave the rest to the incoming governments?
“I make bold to reference that the gratuity and Contributory Pension Scheme in Nigeria
Under Part I of the Second Schedule of the PRA 2014, by the compulsory Contributory Pension Scheme, government, employer and employee contribute separate minimum percentages of the employee’s monthly remuneration to the retirement savings account of the employee.
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“An employer is mandated to contribute a minimum of ten percent(10%) of the employee’s monthly remuneration and the employee is required to contribute a minimum of eight percent (8%) of his/hee monthly remuneration to the scheme..Every employee is mandated to open a retirement savings account (RSA)where the contributions are to be kept, with a Pension Fund Administrator (PFA) supervising the RSA. The PFA is empowered under the PRA to manage and invest the funds paid into the RSA in line with the provisions of the PRA.
“Gratuity on the other hand refers to a lump sum benefit provided by the employer to reward employees at retirement for his/ her meritorious and long service to the Organization. The lump sum which is made in a single payment is used as a reward to a worker for a commendable and extensive service to the organization or establishment at the time of his retirement. Before the Pension Reform Act 2014, it was common for private companies and businesses to pay gratuities to their workers upon retirement. However, in recent times, only governments (local, state, and federal) pay gratuity to their workers upon retirement.
“While the Pension Reform Act 2014 and the PenCom guidelines mandate employers to contribute to the Contributory Pension Scheme (“CPS”)., employers can offer higher monthly contributions towards the employees’ Retirement Savings Accounts and can also pay any extra gratuities, farewell packages, thank-you allowances and any other retirement benefits to the employee.
“The PRA and PenCom guidelines recognize such added retirement benefits but employers are not mandated to pay such added benefits. However, where an employer has included gratuity and other additional retirement benefits in the terms and conditions of service or employment agreement of an employee, such employer is bound by such terms as well as by the CPS.
“It should be noted however that employees and employers cannot waive their obligations under the CPS as it is a mandatory provision under the relevant statute.
“In furtherance of this, PenCom released the Guidelines for the Administration of Gratuity Benefits on April 6, 2017. Paragraph 2.1.1. of the Guidelines states that in addition to existing agreements between employees and employers, the payment of gratuity shall continue under the current pension regime. Therefore, Alex Otti should do the needful”
