PHCN: Between Superannuation And Pension

Wednesday, August 8, the crisis of confidence between the Federal Government and staffers of the about-to-be-privatised Power Holding Company of Nigeria (PHCN) came to a head. Although unperturbed by plans to privatise the behemoth, the workers are worried about what their leaders called the insensitivity of the government on their disengagement packages.

While the workers consider the conditions of the superannuation scheme as contained in their letters of appointment as fair, the government insists that the 2004 Pension Reform Act (PRA) is sacrosanct.

According to reports, PHCN is valued at N220billion. The workers disagree. The total severance package is said to be in the region of the total value placed on the public utility. Clearly, the country is selling this all-important public utility at a loss.

It is much worse that the 2012 budget makes provision for a mere N87billion for severance benefits of the workers. It is poor arithmetic on the part of the Bureau for Public Enterprises (BPE) and the Ministry of Power. We therefore urge that the presidency wades into the issue to mitigate an after-sale spiral effect of this sector.

But we immediately need to resolve the legal conundrum created by the settlement of the severance packages of the workers engaged long before the PRA became operational. We wonder why the government would remain intransigent rather than engaging diplomatically with them on the way out of this impasse.

We are worried that a hard-line posture would compound the issues at hand. The fact that many of the workers have had to endure the pains of a 25% basic salary deduction before 2004, makes it a hard sell to disengage them on a severance package hinged on 15% contributory pension scheme of the PRA.

We support any measure that would bring past management and union officials to account for the mystery of the whereabouts of money deducted from workers’ salaries over the years in the name of severance package said to be jointly managed by both the union and management over the years. 

The trial of indicted persons is non-negotiable. The workers should also be reasonable to cut a good deal with the government that has overreached itself by providing for severance packages of N87billion instead of through the Pensions Fund Administrators and the PHCN management, unlike in the past when privatised companies are left at the mercy of the BPE to settle such benefits from the sale proceeds from the successor company. In this case, it would have been a greater disaster for the both buyers and the workers.