Appraising The Pronouncement Of The House Of Representatives Committee On Finance On The Salaries Of Staff Of The National Pension Commission

BY IVO TAKOR, mni Esq.

The issue of the salary structure of the National Pension Commission (PenCom) has been widely reported in the media. It started when the House of Representatives Committee on Finance announced that it had flagged the salary structure of PenCom and demanded its thorough scrutiny. The controversy started during the  Committee’s interaction with officials of the National Pension Commission (PenCom) on the Medium Term Expenditure Framework and Fiscal Strategy Paper.

The Committee said it discovered that the Commission budgeted N12.02 billion for staff salary and N2.5billion for other staff cost for 2022. According to reports also in the media, the Director-General of PenCom, Aisha Dahiru-Umar, in her submission, said PenCom had 500 staff and had to pay them a competitive salary to ensure they are not compromised. She was further quoted to have said that ”The Commission has to source and retain highly trained staff. We have to build capacity. We have to train  our staff. That is one of the expenses. We have to avoid what is known as regulatory capture. What this means is that our staff will compromised”.

It was reported that following the DGs’ submission a member of the Committee did a crude calculation with N12.02 billion and 500 staffers of PenCom. Based on the calculation  the Lawmaker said he discovered that on average, a staffer of PenCom earns N2.4 million monthly. It was further reported that the DG of PenCom disagreed with the calculation, stating that personnel cost is not limited to salaries and that there were 14 items in what was presented under personnel cost and that nobody in PenCom earns up to N1 million a month from the DG downward.

PRESS RELEASE BY THE NATIONAL PENSION COMMISSION ON THE ISSUE

PenCom thereafter, issued a press statement to the general public on the matter. The release among other things stated that “Following the false and misleading information on the compensation package of the National Pension Commission (PenCom) being circulated in the traditional and social media, it has become necessary to set the record straight in the interest of the Nigerian public. It is being alleged that the least paid PenCom employee earns a salary of N3 million per month. This has fuelled all sorts of false allegations and unfair insinuations. The public is invited to note that the claim is absolutely false. The highest paid official of the Commission earns less than N1 million a month. It is therefore completely illogical and improbable that the least paid will earn a monthly salary of N3 million”

The PenCom press release further stated as follows: “It is imperative to point out that right from the inception of the Commission in 2004, the Federal Government mandated the Board to adopt an employee compensation policy that favourably compares to comparator government bodies in the financial services sector, such as the Central Bank of Nigeria (CBN), the Nigeria Deposit Insurance Corporation (NDIC) and the Securities and Exchange Commission (SEC). Section 25(2)(b) of the Pension Reform Act 2014 also empowers the Board of the Commission to fix the remuneration, allowances and benefits of the employees.

More so, the Presidential Committee on the Consolidation of Emoluments in the Public Sector headed by the late Chief Ernest Shonekan, former Head of the Interim National Government, made a number of recommendations which guide the PenCom Board in its compensation review exercises. One of the recommendations is that the pay structure of self-funded agencies should be benchmarked with their private sector comparators so as to ensure relativity in such agencies and attract and retain high-calibre professionals.

The Shonekan Committee, which was set up by former President Olusegun Obasanjo in 2005, also recommended that the pay structure of regulatory agencies should be benchmarked against sectors they monitor to avoid regulatory capture, and that an annual increase in pay should be undertaken to account for inflation/cost of living adjustment and establishments may strive to attain 50th percentile and above their comparators in the private sector.

We made all these facts known in a recently submission to the House of Representatives Committee on Finance over the compensation package of the Commission. We also stated that the last compensation package review was done in 2017 with the approval of the Office of the Secretary to the Government of the Federation (OSGF). No review has been done in the last five years and this has affected the ability of the Commission to attract, hire and retain staff with competitive skills”.

CONSTITUTIONAL PROVISIONS FOR OVERSIGHT FUNCTIONS BY THE NATIONAL ASSEMBLY ON MONEY BILL.

Section 59(1)(a) of the Constitution provides for the exercise of oversight functions by the Federal Legislature on money bills. It provides that “an appropriation bill or a supplementary appropriation bill including any other bill for the payment, issue or withdrawal from the Consolidated Revenue Fund or any other Public Fund of the Federation of any money charged thereon or any alteration in the amount of such a payment, issue or withdrawal”.

The exercise of effective legislative oversight functions by the legislature over the executive arm of government in a democratic setup is very important in national development. It provides a crucial system of checks and balances especially in the disbursement and administration of funds appropriated by Acts. Therefore what the House of Representatives Committee on Finance was doing, falls within the powers conferred on it by the Constitution.

THE HOUSE OF REPRESENTATIVES COMMITTEE PRONOUNCEMENT ON SALARIES OF STAFF OF THE NATIONAL PENSION COMMISSION: AN ACT OF PATRIOTISM OR BLACKMAIL

PenCom however, is convinced that the pronouncement of the Committee may be an act of blackmail. It’s press release states that, “We understand that there is an element of mischief and possible blackmail on the Commission’s compensation package. From our understanding, it appears someone calculated all staff costs, including training, staff exit benefit scheme, and employer’s pension contribution, and divided the total by the number of the Commission’s employees and concluded that the least paid employee is on a monthly salary of N3 million. There is a clear difference between staff cost and staff salaries”.

In agreeing with PenCom in this line of thinking, one believes that the Finance Committee, that is saddled with responsibilities for budget, should know that personnel cost is a combination of salaries and other personnel overhead.

To remove any element of mischief, biases or blackmail, the Committee may have to reveal to the general public, employee compensation packages of the other regulatory bodies in the financial services sector, such as the Central Bank of Nigeria (CBN), the Nigeria Deposit Insurance Corporation (NDIC) and the Securities and Exchange Commission (SEC).

On Monday 19^th September, I was waiting for a friend in one of the Executive Lounges in Lagos and I ear dropped into a conversation by four gentlemen, who clearly from their dressing and mannerism could not have been average common men but members of the ruling class. They were discussing politics and one of them suddenly just said PenCom and members of the National Assembly should stop disturbing the peace of people. I immediately became very attentive because I take keen interest on issues of welfare of senior citizens especially those who have worked and are entitled to pension, which is a deliberate program aim at taking them out of old age poverty and destitution. The man went further to say that “PenCom has been declaring pension assets of N4trillions and this is election time. They should take some hundreds of millions and go to the National Assembly to end this nonsense”.

I was so shocked and was at this point, tempted to invite myself into the discussion because this was not just any beer parlor discussion by the uninformed. Unfortunately for me, my friend came in at that point and we had to leave. I had intended to inform them that Section 11(3) of the Pension Reform Act 2014 provides that “The Employer- (a) deduct at source the monthly contribution of the employee; and (b) not later than 7 working days from the day the employee is paid his salary, remit an amount comprising the employee’s contribution under paragraph (a) of this subsection and the employer’s contribution to the Pension Fund Custodian specified by the Pension Fund Administrator of the employee”. The trillions of Naira pension assets are in Retirement Savings Accounts (RSAs) of individual members of the Scheme and not in PenCom bank accounts neither those of Pension Funds Custodians who warehouse the Fund not those of Pension Funds Administrators, who manage and invest the funds. Funds of PenCom are principally derived from fees, fines, charges and commissions made by it,  Section 32(1)(d) Pension Reform Act 2014.

OPENING OF PUBLIC DEBATE ON THE SALARIES AND ALLOWANCES OF MEMBERS OF THE NATIONAL ASSEMBLY.

The House of Representatives Committee has unwittingly, reopened national discussion on the the salaries and allowances of members of the National Assembly. Section 70 of the Federal Republic of Nigeria 1999 Constitution (as amended) provides that “A member of the Senate or of the House of Representatives shall receive such salary and other allowances as the Revenue Mobilisation Allocation and Fiscal Commission may determine”.

The actual salary of members of the National Assembly has been an issue of speculation and controversy for years, as members of the National Assembly are being accused of fixing “jumbo” salaries and allowances for themselves, using the privilege of being in-charge of Annual Appropriation Bills. The controversy culminated in a Federal High Court sitting in Lagos in June 2021 or thereabouts, saying that it is illegal for the National Assembly to fix its own allowances. In what was described as a landmark judgement, Justice Chuks Obiozor said only the Revenue Mobilisation Allocation and Fiscal Committee can fix salaries for public officers. It is not yet clear if the judgement of the Federal High court is subsisting.

The Punch  newspaper of 14^th December, 2021 carried an article with the titled “Senators, Reps get N52m, N32m yearly office running allowance – LAWAN” written by one Sunday Aborisade. According to the article, the President of the Senate in a paper presented at the First Distinguished Parliamentarians’ Lecture Series organised by the National Institute for Legislative and Democratic Studies said “the monthly salary of a Senator was N1.5m, while that of a member of the House of Representatives was N1.3m”. The Senate President was quoted to have also said that “the N13m thrown into the public space a few years back as the monthly salary of a Senator was actually their quarterly office running allowance”. He was further quoted to have said that “the average office running cost for a Senator is about N13m while that of a member of the House of Representatives is N8m”. Concluding on the topic, the Senate President was quoted to have said “the N13m and N8m quarterly office running cost for members of the Senate and House of Representatives respectively were the lowest of any presidential democracy in the world”.

MEMBERS OF THE HOUSE OF REPRESENTATIVES COMMITTEE ON FINANCE AND EQUITY

One wonders if the maxim “He who comes into equity must come with clean hands”, and taking into consideration the controversy surrounding the ‘jumbo’ salaries and allowances of Nigerian legislators, has a place on the current discuss. can anyone in good conscience say that members of the House Committee on Finance were just, fair and impartial in their pronouncement on PenCom staff salaries.

You cannot be seen to wear clothes of righteousness and pursue Agencies of Government for “wrong doing” when the public see you as a sinner. We must have to frown at abuse of power and privileges by those in positions of authority.

PenCom is a self funding Federal Government Agency, while the National Assembly fully  relies on its funding from the National purse.