Opinion: Before we lose the gains in the pension industry | A look into PenCom and Chidi Duru

Written by Chidi Okoye

So once, I was in transit, going past the secretariat of a certain state government when lo and behold, I spotted something that was to haunt me for a long time to come. In fact, it has haunted me to this very day.

Sprawling on the tarmac in front of the secretariat complex were old and vulnerable Nigerians. No, they were not protesting a hike in the fuel price by Government, neither were they begging for money. They were simply protesting ill treatment by a system they had served all their lives. They were asking the Government to pay them their pension; the fruit of giving their all to the Fatherland, a prize for loyal servants worthy and deserving of a well-earned rest.

Of course, these people were and are still within their rights. Everybody who has put in work during the days of his youth deserves to receive his pension from either the Government or the organisation he served. Depriving people of such a basic right is wicked and inhuman.

In recent years, one has been inundated with tales of mega frauds in the pensions sector. One hears tales of the alleged misappropriation of funds meant by pensioners by those entrusted by law to keep them safely.

In 2015, Mr. Abdulrsheed Maina, a former Chairman of the Pension Reform Task Team was accused of allegedly stealing more than N2 billion in pensions.

Shocked? There’s more.

Earlier this year, the Economic and Financial Crimes Commission arrested the now suspended Director-General of the Pension Transitional Arrangement Directorate, Nelly Mayshak, and three others, Yoab Youssoufou, Patricia Iyogun, and Ruth Imonikhe for being complicit in an alleged N2.5bn fraud involving the savings of workers.

One can go on and on about the many instances of sleaze and theft in the pensions sector.

Seeing this, people naturally became sceptical about keeping pension accounts, and justifiably so. What is the point of saving all that money for retirement only to have some people enrich themselves at your own expense? Is it not better to just spend the money on yourself, instead of keeping said money in the hands of thieves and dishonest people?

Valid points, you might add.

At that point, it became abundantly clear that the sector needed a regulator. A firm, decisive, no frills arbiter who would help win the trust of people by securing their hard earned savings.

Along came PenCom – established as the apex authority statutorily saddled with the responsibility of regulating and supervising the pension industry in Nigeria. Among its many fundamental responsibilities is the licensing, regulation and supervision of all pension operators in order to ensure the protection of pension funds and maintain a sound pension administration system in Nigeria.

With PenCom’s coming, one can say a measure of sanity has returned to the sector as more people have shown more trust in the process. However, a particular development threatens to truncate the hard gains PenCom has made in the last few years, plunging the sector into another round of crisis.

The actors this time around are a former member of the House of Representatives and former Chairman of the House of Representatives Special Committee on the Pension Reforms Bill, Mr Chidi Duru and a licensed pension funds administrator, First Guarantee Pensions Limited (FGPL).

According to reports, trouble started when PenCom embarked on a series of routine and special examinations on FGPL spanning the years 2007, 2008, 2009, 2010 and 2011, all of which revealed persistent infractions and unsound corporate governance practices perpetrated by Nze Chidi Duru, the then Vice Chairman of the Board of FGPL.

Basically, here are the facts. As the Chairman of the ‘Board Executive Committee’, Nze Duru diverted part of equity contribution of Novare Holdings (Pty) for the purchase of a personal property in Lagos. The purchase was handled by the PFA’s external Company Secretaries. Spurious and additional entitlements were paid to Chidi Duru. There was the payment of unapproved consultancy service charges to Novare Holdings whose representatives were also paid as employees of the PFA with benefits including ten, yes, ten vacations to South Africa each year paid by the company. Pre-incorporation expenses in excess of N40m claimed by Chidi Duru and additional ‘sweat equities’ for his presumed efforts was converted as shares in the name of his companies, including BP Outsourcing Limited and Grand Towers Plc and without approvals.

As a result of the above findings, various regulatory directives were issued but were all disregarded by Mr, Chidi Duru. The regulatory directive on the contract awards for software development and consultancy services was ignored as well. What is particularly befuddling is that the transactions were shrouded in secrecy and double invoiced payments were made for all of them. There was also a high volume of board related expenses in favour of Nze Chidi Duru, including the payment of N10m in executive allowances to him alone, payment of his hotel bills, security bills and refunds for ‘marketing expenses’. Fixed assets, including two 60KVA generating sets were purchased by the PFA for Nze Duru’s business premises in Abuja and a private residence in Lagos. To highlight the level of crass impunity prevalent at FGPL, the transactions were carried out without the approval of the board.

Perhaps, to forestall a situation where the PFA may run into murky waters and be unable to fulfill its obligations towards its customers, and in order to protect pension assets (which at that time was worth N42.2 billion being managed by the PFA on behalf of over 163,617 Retirement Savings Account (RSA) holders), PenCom summoned an all shareholders meeting where the infractions were revealed to the shock and annoyance of all 37 shareholders, including one who would later flip sides and defend Chidi Duru in a petition to the National Assembly.

To cut a very long and sad story short, PenCom invoked its powers and removed three indicted directors- Chidi Duru inclusive. Pencom further exercised its statutory powers and set up an interim company to protect FGPL’s N42.2 Billion in pension assets.

Assets which we should remember, belong to hard working pensioners.

Mr. Chidi Duru has however failed, refused and/or neglected to take this in good faith, as he has vowed to fight PenCom with his ‘connections in high places’.

It is rather appalling that Mr. Duru is attempting to circumvent the entire process and promote the false narrative that he was forced out of the company by the regulator. It is bad enough that while he was the Chairman of the House Committee on Pension Reform, he went behind the backdoor to incorporate a PFA. Ethical issues? Maybe.

At this stage however, it is very important for Mr. Chidi Duru for step aside and let PenCom perform its statutory duties – which is to basically regulate the pension sector and protect the precious savings of working class Nigerians. I am certain that workers who contribute to the various PFAs on a monthly basis (myself inclusive) would rather prefer that Pencom continues its hard-line approach against PFAs that are not properly run.

Perhaps, Mr. Chidi Duru should stop his attacks on PenCom, its boss and those affiliated with it and support Pencom’s drive to rid the industry of fraudulent elements. Like he once did in 2004.


Op–ed pieces and contributions are the opinions of the writers only and do not represent the opinions of Y!/YNaija

Chidi Okoye is a public affairs analyst

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