Union Bank pensioners petition PenCom, allege breach of Pension Reform Act
Union Bank pensioners, have petitioned the National Pension Commission, PenCom, accusing the management of the bank of breach of the Pension Reform Act, PRA, 2004, to their detriment.
Under the umbrella of Union Bank Pensioners Association, UBPA, they listed existing Pension Scheme in Union Bank of Nigeria, UBN, Plc before commencement of the Pension Reform Act, computation of legacy fund entitlement, lump sum withdrawal- Legacy fund, interest payment on the legacy fund and actuarial valuation as their major areas of grouse.
In the petition by the Acting National President and National Secretary, Abdu Gaba and B. Oduntayo among others, the pensioners urged PenCom to arrange a meeting within 14 days with the elected representatives of the staff, pensioners and management of the Bank, to enable them find a lasting solution to problem before it degenerated into major crisis.
According to the petition, 'One major issue that came out of the meeting held with Union Bank Management, Pensioners' Association, Pension Fund Administrators, PFAs, and your office on 19thMarch, 2013 was that although Union Bank initially submitted an application to continue with the closed Pension Scheme, but they subsequently and unilaterally withdrew this application without due consultation with the stakeholders.
Furthermore, it was also reported that Union Bank Management expressed their unwillingness to continue with the closed Pension Scheme, again without due consultation with other stakeholders.'
'It is our position that Union Bank management cannot unilaterally withdraw from the scheme without the agreement of other stakeholders. It is interesting to note that Union Bank entered into a contract of service with each employee to pay their pension for life. Any unilateral variation of the contract under the dubious guise of compliance with the PRA cannot be supported either in Law or logic. It is a trite Law that equity will not allow any person to profit from his/her own wrong. When viewed against the above premise, the purported withdrawal of the application to continue the closed Pension scheme is a legal nullity. The Management of UBN should therefore revert to the status quo ante in the payment of pensions.'
The Pensioners said 'In the meeting of 19thMarch, 2013, the Pensioners' Association was told that what was credited to the PFAs was not legacy fund entitlement but 'accrued rights'. We beg to disagree because whatever names you give to it will not alter the rights of beneficiaries under the PRA. It is a well known fact that UBN, before the enactment of the PRA, had in existence a well managed in-house Pension Scheme.
Regrettably, UBN management since 2010 resented the in-house closed Pension Scheme, and thus pursued, at various occasions, its plans to exit the in-house Scheme. However, it was told in very clear language that UBN cannot exit the scheme without complying with Section39 of the PRA.
'The adequacy of the legacy fund payment to each beneficiary is questionable. The management of UBN does not want to comply with any of the above requirements but has continued to maintain a belligerent posture under the guise of complying with the PRA. A cursory review of the various sums credited to the PFAs against the last monthly Pension of each beneficiary indicate that their share of the legacy fund can only support monthly payments for about three years on the average. The question that readily calls for asking is what will be the means of sustenance of the Pensioners thereafter? The object of the PRA is to guarantee a good standard of living for the Pensioners. The PRA was not enacted to reduce the retirement benefits of employees. In the circumstance, any manipulation to place the pensioners and employees at a disadvantage will be resisted.
'The computation of the legacy entitlements should be predicated on the contracts of employment of individual employee as expressed in the Trust Deed. Therefore, any formula which failed to take into account the employees' years of service, income, percentage of Pension entitlement and expected life span is dubious and unacceptable. We insist that the basis of computation should be known or the payment to the various PFAs will be regarded as ex-gratia payment pending the payment of legacy fund entitlements.'