TUC warns FG not to tamper with N5trn pension fund

TUC warns FG not to tamper with N5trn pension fund

Sunday, February 21, 2016 5:56 pm

Labour unionists on the march

Labour unionists on the march: TUC warns against FG touching pension money

By Eromosele Ebhomele

Nigeria’s Trade Union Congress, TUC, on Sunday breathed hot over suggestions by some lawmakers in the country that the accumulated N5 trillion pension funds supposedly meant for workers be deployed for infrastructure development.

The TUC said it condemns such suggestion and that it has repeatedly made its position on the “vexing issue” very clear and this is that “the pension scheme was informed by the need to assuage the poverty of and difficulties faced by retirees and not to raise money for provision of any infrastructure nor investment at the instance of the rich.

“We also use this opportunity to reiterate that the 25 percent of total contribution paid at first instance to workers on retirement is too small. Anything less than 50 percent defeats the purpose of the scheme.

“As it stands today many states claim inability to pay the national minimum wage of N18,000, a sum that is itself barely enough to take the worker home talk less of paying the bills for his family’s shelter, upkeep and development.

“Infrastructural development remains the duty of the government. It is a key driver and a critical enabler of sustainable growth all over the world, as it provides a unique avenue for the public and private sectors of the economy to thrive. It is also critical in attracting foreign investors.

“Nevertheless, rather than appropriating the monies saved from workers’ contributions to perform the government’s responsibility to fix roads, electricity and other social infrastructure, we recommend that the funds be utilised in projects that are of direct benefit to the retirees and other workers, such as fixing the chronic housing deficit. And this must be done with rules for proper accountability well in place.”

The TUC which noted that housing deficit remains a major problem facing Nigeria, said many people live on the streets while most workers cannot afford a decent home.

It said some workers resort to borrowing from banks to build their homes at “forbidden” interest rates as most of them end up losing the houses to the banks because of inability to repay the loans and accumulated interests.

“While we appreciate the effort of mortgage institutions and developers, we have also observed that their houses are unduly expensive.

“There should be rules that allow workers to borrow from their retirement savings at friendly interest rates to build houses, using accumulated savings as collateral. Thus a contributor who has N5 million in his Retirement Savings Account (RSA), for example, should be at liberty to borrow as much as N3 million from it at single digit interest rate.

“This makes a lot more sense than the present scenario where the same contributor may find himself having to approach a bank to borrow the N3 million at 30 percent interest rate to build a house.

“Equally appalling is a situation where a contributor pays about N8 million to mortgage institutions for a house worth N5 million,” the labour union complained in a statement signed by Comrade Bobboi Bala Kaigama, its President, and Comrade (Barr.) Simeso Amachree, is Acting Secretary-General.

TUC however said it recognised the daunting task before the President Muhammadu Buhari administration “consequent upon the total rape of the economy by some unscrupulous characters whose stock in trade is to launder and stockpile money in sewage pits.

“We also applaud the war on corruption, and it is our view that the infrastructural needs of the country would be more appropriately met with recovered monies from the war and from traditional sources of development funds than with pension funds sourced from the sweat of toiling, underpaid Nigerian workers.

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