By Matthew Denis
The Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) has called for better welfare for pensioners in the oil and gas industry.
In a one-day summit organised by the Association recently in Abuja with the theme: “The Future of Pension in the Nigerian Oil and Gas Industry”, the event aimed at addressing issues affecting Closed Pension Fund Administrators (CPFAs) and improving retirees’ welfare.
The summit, which brought together critical stakeholders in the oil and gas sector, including the National Pension Commission, Pension Fund Custodians, and Operators, further aimed to discuss fair pension management for workers and retirees in the country.
In his opening remarks, the President of PENGASSAN, Comrade (Engr.) Festus Osifo, said the summit was organised to engage PENCOM and other organisations in order to evaluate the challenges currently facing the Closed Pension Fund Administrators (CPFAs) and find best practices that will promote and ensure retirees benefit from current economic realities.
He said: “Making advocacy on these organisations over the gaps in pensioners’ remuneration and pension to enable them close the gaps to better welfare of the pensioners.
“The association decided to engage PENCOM and other organisations saddled with the responsibility of paying pension to retired workers to do so with fairness and bridge the gaps in order to ensure good welfare of pensioners in the oil and gas sector,” Osifo said.
He observed that there was lacuna within the process of the fund, noting that retirees who left service several years ago can no longer meet the market demands of the present economy.
Comrade Osifo explained that the 2004 Pension Reform Act introduced the contributory pension scheme, but several oil and gas companies were exempted from the new system and operate what he described as “closed schemes”, where only employers contribute to employees’ retirement funds.
He said over time, some managements have been magnanimous enough to add little amounts to what pensioners were earning, saying more needs to be done to bridge the gap.
“We actually decided to take up this issue, an issue that is bothering our closed pension fund administration in Nigeria. The reason is very clear. For those who didn’t really know, in 2004, we had the pension reform system in Nigeria and when that pension reform happened, we had a system whereby some companies started the pension fund administrators.
“So over time, in 2014, there was also a new legislation that came that now stops new employees from 2014 from joining the defined benefits.
“That means even if you operate the defined benefits, the company like Chevron, the company like NSO, Settler, TotalEnergies, NNPC, DPR, and all that, even when you operate that closed pension fund system, so by 2014, there was a gap. So anybody that was employed into these organisations from 2014 could no longer join the defined benefits. You now need to be under the PFE.
“Over time, we have realised that there were some levels of lacuna within the process and within the system, that people who retired several years ago, under the defined benefits, their remuneration or rather, their retirement benefit has somewhat been capped.
“Imagine people that retired in 1990, imagine people that retired maybe 2001, even 2010, as recent as 2010. So when they retired at that time, they were going home with what they thought was okay in terms of the value of our currency.
“What, for example, we all know, what 200,000 Naira could buy for you in 2010, today, truly, it can no longer buy,” he noted.
The PENGASSAN President, who is also the President of the Trade Union Congress (TUC) of Nigeria, called on the National Pension Commission (PENCOM) and other major oil stakeholders, including TotalEnergies, ExxonMobil, Chevron, and the Nigerian National Petroleum Company Limited (NNPCL), among others, to come up with mechanisms and fair adjustments that will reflect the present economic realities to restore the confidence and dignity of pensioners.
According to Comrade Osifo, “Pensioners were once union veterans who fought for the workers’ rights. It is now our duty to fight for their comfort.”
The PENGASSAN President, while commending PENCOM for maintaining its position in regulating the sector, said he believed the Commission remains one of the most credible regulatory institutions in the country, and further appealed to the Commission to deepen its oversight and protect the interest of pensioners.
In her remarks, the Director-General of PENCOM, Mrs. Omolola Oloworara, who was represented by Mr. Abdulqadir Dalhatu, Head of Investment Supervision Department, confirmed that the Commission had already introduced new supervisory mechanisms and frameworks to reinforce governance to ensure that funds meant for contributors are well protected.
Mr. Dalhatu assured that PENCOM will continue to maintain public confidence and trust in the pension management system. He said the Commission will be reviewing the investment guidelines to meet global best practices and ensure the long-term safety of pension assets.
Also, in his keynote address, the Managing Director, TotalEnergies, Mr. Benjami Okeke-Agedi, who was represented by the company’s Chief Finance Officer, Mr. Wale Olusoji, noted the importance of CPFAs adopting technology, innovation, and sustainable investment strategies to remain relevant in the financial landscape.
“For CPFAs to thrive, they must integrate ESG reporting and invest in impactful asset classes such as infrastructure and green houses to support Nigeria’s energy transition goals,” he said.
Mr. Olusoji also called on stakeholders in the oil and gas sector, including the unions, to uphold strong governance and transparency in the pension ecosystem, believing that the sustainability of CPFAs depends on collective responsibility, sound regulation, and innovation.
The one-day summit also witnessed the presentation of an award by the Labour Correspondents Association of Nigeria (LACAN) to the PENGASSAN President, Comrade (Engr.) Festus Osifo.