Oral notice to terminate a written employment contract …


Notice is notice whether in writing or oral provided both parties are not misled as to what is meant. It does not matter, in terminating an employee’s appointment, whether he is given notice in writing or orally or not. What is important is whether the employer has demonstrated clearly by action that the services of the employee are no longer required by the employer” – per Mohammed, JSC in Ifeta v. S.P.D.C (Nig.) Ltd (2006) 8 NWLR (Pt. 983) 585.

In the instant case, the employee was informed at a meeting that he is fired, though he was not issued a letter of termination. One of the issues for determination before the court was whether the oral notice was effective since the subject matter employment contract provided that either party could terminate only by “notice in writing”. The SC held in the affirmative.

  1. There is a great deal of flexibility that courts tend to apply in the interpretation of employment contracts (and nearly always in favour of employees) – the courts will mostly look to the intent of the parties rather than the form of the contract. Otherwise, the law is trite that when parties have reduced their agreement into a document, the Court will not look outside the document in deciding the rights and obligations of the parties.
  2. Similarly, an oral notice to quit issued by an employee would equally be effective against the employer.
  3. Oral notice to terminate is likely to present some practical difficulties as it could be open to different interpretations. This is not likely where the notice is in writing as the document would speak for itself.
  4. It is best to put into writing your notice/intention to terminate/dismiss. Where the notice is oral, it should be reduced into writing shortly after and re-issued. It is needless to get entangled into legal haggles about something as basic as your intention to get out of an employment contract.


Ikoyi Billions: At the Cross Roads of Financial Crimes and National Security

By Bolaji Adebiyi in Abuja

Vice-President Yemi Osinbajo’s committee set up to investigate the N13.3 billion recovered from a flat in Osborne Towers, Ikoyi, Lagos got cracking on Monday, reviewing replies to questionnaires it sent out at the weekend to principal characters in the inquiry that intelligence quarters warn could expose the underbelly of the nation’s foremost spy organisation, the National Intelligence Agency (NIA).

The committee, which also includes the Attorney-General of the Federation (AGF) and Minister of Justice, Mr. Abubakar Malami (SAN), and the National Security Adviser (NSA), Maj.-Gen. Babagana Monguno (rtd), was constituted by President Muhammadu Buhari last week to investigate how and by whose authority the money claimed by the NIA was made available to it, and to establish whether or not there had been a breach of the law or security procedures in obtaining its custody and use.

The committee is also to investigate allegations of violations of the law and due process made against the Secretary to the Government of the Federation (SGF), Mr. Babachir Lawal, in the award of contracts under the Presidential Initiative on the North East (PINE), running into millions of naira.
The Director-General of the NIA, Ambassador Ayo Oke, and Lawal were suspended last week pending the outcome of the investigation which report is expected within 14 days.

While Lawal’s troubles began in December last year when the Senate indicted him for allegedly awarding PINE contracts to his company, Rholavision, Oke’s began on April 12, 2017 when the Economic and Financial Crimes Commission (EFCC) raided the Osborne apartment, hauling in N13.3 billion. It is the biggest cash found in a single operation since the whistle blowing policy of the federal government started yielding fruit.

Although the EFCC, which had presumably leaked the find to the media, left the public in doubt about the ownership of the billions, the doubt was cleared when THISDAY reported that the funds belonged to the NIA, which claimed that the flat was a safe house in which it kept some of its money for covert operations.

The agency was later to explain that the money was part of the $289 million intervention fund approved for its covert operations and infrastructure development by President Goodluck Jonathan in 2014. Some of the operations and projects in Abuja, according to the agency, had been completed, while others are still ongoing. It said the Ikoyi money was warehoused for some of the operations in Lagos.

Questions that immediately arose from this claim were whether the president, to whom the agency’s DG accounts to directly, and the NSA, who coordinates the nation’s intelligence agencies, knew about the money? Why was the money not kept in the agency’s headquarters that was more secure? Why was it that the wife of the agency’s DG ferried the money to the safe house? And whether it is usual for the agency to keep such a large amount of money in cash?

These are obviously questions that the Osinbajo committee would have to unravel.
But intelligence experts that spoke to THISDAY on Monday warned that except the investigation is handled with extreme care, the nation’s intelligence community might be undermined with dire implications for national security. They contended that because of the security implications of the operations of intelligence agencies, they operate largely under cover, making their modus operandi unusual, clumsy and, in fact, sometimes illegal.

“The unusual operational practices of intelligence agencies are a worldwide phenomenon,” a source said on Monday, adding: “When Nigeria needs to intervene in the politics of another country, say, Liberia, to install a president that will support its policies, how do you think it does it? It is the NIA that is used.

Where in its books would you find such operational funds?” Another typical example was the $400 million cash flown by the United States government to Iran after a deal was struck to end Iran’s nuclear programme.
Asked if such unusual operational mode is not subject to abuse, the source admitted it could, but argued that there were standards and rules, guiding intelligence operations, explaining that in terms of financial accounting, the agencies are usually responsible directly to the president.

“So there can be no such thing as money laundering as far as intelligence is concerned because the agency’s operatives would always be in possession of money for covert operations,” he said.
Basically, what the source was pointing out was that because the world of intelligence and espionage is almost always murky and clandestine, it is likely that its business is not usually done through bank transfers and cheques, and almost always done by cash. “It’s like asking the CIA to pay informants through transfers,” he quipped.

Actually, by the provisions of Paragraph 12(1) & (2) of the National Intelligence Agency Instrument No.1, a subsidiary legislation to National Security Agencies Act, 1986, the NIA accounts directly to the president and its accounts are prohibited from external auditing.

Obviously aimed at protecting intelligence operations, the instrument derives from an October 21, 1960 memo from Prime Minister Abubakar Tafawa Balewa to the Director, Directorate of Research, Ministry of External Affairs, Alhaji Aminu Sanusi, directing the latter to account directly to him.

“You will be responsible, through the Secretary to the Prime Minister, to me personally for the proper expenditure and accounting of all funds from the secret vote. Those funds will not be subject to detailed audits, but you will be required to render a certificate to the Secretary to the Prime Minister on 1 January to 1 July of each year, showing the total sum expended during the period and a breakdown of the main headings under which such expenditure has been made,” the prime minster said in the memo to the director, who is the precursor of the DG, NIA.

Did the DG, NIA comply with this law? Insiders told THISDAY that Oke did. In his April 2015 general brief to the president on the state of affairs of the agency, he itemised the $289 million intervention fund approved and released to the agency by the Jonathan administration in November 2014. In another memo to the NSA in January 2016, he gave more details of the funds, including projects being undertaken, the amount expended, balance in the bank and cash at hand.

Based on his report, the NSA set up a verification team, which inspected the projects and submitted its report in February 2016. The NSA wrote back to the DG, NIA on 17 May 2016, stating that the detailed report of NIA’s projects and exercises had been presented to the president who was pleased with the agency’s foresight in developing the critical infrastructure outlined in the report.
If Oke filed his report with the appropriate authorities, why then is he in trouble? Insiders suggest that his bosses might not have read the reports and secondly that the inter-agency rivalry might have been at the root of his woes. Both might be at work.

While the president might not have been able to read the report because of his busy schedule that was compounded by his health issues, Monguno is said to loath reading. The reports, THISDAY gathered, are however, part of the annexures to the reply to the questionnaire sent to him by the Osinbajo committee.

There has been a running battle between the EFCC and NIA since April last year over the financial operations of the spy agency. The EFCC had instituted a secret investigation into the Central Bank of Nigeria (CBN) account of the NIA. The intelligence agency only became aware of the investigation when the account of Julius Berger PLC, one of the contractors handling its projects, was blocked.

Enraged by what it believed to be a breach of the law and security protocol, the NIA protested to the NSA who in an April 19, 2016 memo to the EFCC asked it to “refrain from the external audit of NIA and other intelligence agencies” as it contravened Paragraph 12(1) & (2) of NIA Instrument No 1 issued under the NSA Act, 1986.

The EFCC was apparently not happy with the NSA’s restraining order, insisting that it had the powers to investigate suspected financial crimes. The NIA opposed this claim on the grounds that intelligence service involves national security, which cannot be enquired into by a non-intelligence body like the EFCC. This conceptual disagreement perhaps explains why on April 12, 2017 when the NIA requested the EFCC to call off its raid on its Osborne flat, the anti-graft agency refused.
This is one big issue that the Osinbajo committee would have to crack: Can the warehousing of the billions claimed to be operational funds of the NIA in the Ikoyi flat be classified as a financial crime (money laundering) that the EFCC is empowered to investigate and prosecute, or is it a national security issue that the anti-graft agency is precluded from enquiring into?

Other questions that must be addressed would have to focus on the operations of the EFCC, which in several instances has been known to put the cart before the horse. Did the EFCC obtain a search warrant to break into the Ikoyi apartment? If it did and proceeded to the court to obtain a temporary forfeiture order, did it do a search at the Lagos Lands Registry to ascertain the owner of the flat? Did it extend its search to the Corporate Affairs Commission (CAC) to verify the shareholders/directors of the company said to have bought the flat? Why did the EFCC ignore the NIA DG and the agency’s operatives when they owned up to the billions discovered in the flat? With the lid blown open on what was obviously a covert operation, who takes responsibility for the glaring breach of security protocol?

Most importantly, the Osinbajo committee has to ensure that in trying to establish probity and accountability, his committee will also attempt to ensure that what security and intelligence agencies do in the “dead of the night” to keep us safe, is not compromised.

Source: This Day

Legal Treatment of Occupational Safety and Health in Nigeria

courses-postgraduate-public_health-occupational_health_safety_environmental_managementOccupational Safety and Health (OSH) is commonly defined as the promotion and maintenance of the highest degree of physical, mental and social well-being of workers in all occupation. It means the totality of all activities and programmes that are engaged upon, aiming to attain and maintain the highest level of health and safety for all people who are engaged in any type of work. It involves the protection of workers’ health from any hazard to which they may be exposed in the work environment.

The human, social and economic costs of occupational accidents, injuries and diseases and major industrial disasters have long been a cause for concern at all levels from the individual workplace to the national and international levels. Globally, it is estimated that every 15 seconds, 153 workers have a work-related accident, which results in at least one death. In sub-Saharan Africa, the fatality rate per 100,000 workers is 21 and the accident rate is 16,000. This means that each year 54,000 workers die and 42 million work-related accidents take place that cause at least three days’ absence from work. Recent studies put the annual work-related death rate of Nigeria at about 24 fatalities per 100,000 employees, which is one of the highest in the world.

OSH is concerned with protecting the safety, health and welfare of people engaged in work or employment. The enjoyment of these standards at the highest levels is a basic human right that should be accessible by each and every worker. Regardless of the nature of their work, workers should be able to carry out their responsibilities in a safe and secure working environment, free from hazards.

These rights are usually set out in appropriate laws to ensure that both employers and employees are clear about the obligations and the consequences for neglecting them. OSH in Nigeria is largely based on the Factories Act, enacted in 1987 and a few other complementary legal provisions in the Labour Act 1974 and the Employees Compensation Act 2010. These legal provisions, put together, are clearly inadequate in terms of coverage and currency. The Factories Act, for instance, does not include the construction industry in the definition of premises, and hence construction firms frequently have to rely on OSH regulations from other jurisdictions, which are not necessarily enforceable in Nigeria.  The severity of penalties for violation under the extant OSH laws is also inadequate to sufficiently deter offenders.

It is surprising that Nigeria is yet to enact a comprehensive law on OSH even with its high occurrences of occupational accidents. However, with the sheer size and documentation of accident/disaster experiences across factories and other workplaces, there is no basis whatsoever for a developing country like Nigeria to be reactionary to accidents.

The Factories Act empowers the Inspectorate Department of the Federal Ministry of Labour and Productivity to enforce the minimum standard requirements on OSH. The enforcement processes require issuing of warning or notices to offenders, after which the lower level of enforcement, which includes the sealing of a defaulting factory, takes place. Correspondingly, the Nigerian Social Insurance Trust Fund Management Board implements the Employee’s Compensation Act of 2010, which makes provisions for compensation for any death, injuries, and diseases or disabilities due to employment. The provisions of the Labour Act that touch on OSH relate to the employment of women and young persons in agricultural and industrial undertakings. There is little or no reference to OSH for other categories of workers.

The ideal that there should be daily inspection of workplaces by factory inspectors and monthly reports sent to the Federal Ministry of Labour and Productivity is not achievable, as the Ministry is said to have less than 150 factory inspectors for the entire country. Lack of skilled manpower is one of the major reasons for poor enforcement of OSH regulations and is also the reason why regulatory enforcement is reactive rather than proactive. The LSHW Bill adopts a proactive and collective participatory approach of enforcement in accordance with international best practice. It requires the participation of the Nigerian Institute of Safety Professionals, National Council for Occupational Safety and Health, OSH committees, safety and health representatives, employers, research institutes, principal contractors and the education sector. It places due responsibilities on OSH committees and the safety and health representatives at the grass-roots level, by having them monitor, regulate and maintain the safety of employees in the workplace. The logic here is that OSH is the responsibility of all and should be taken as such.

 In practice, citation contests and disputes between OSH regulatory authorities and the duty holders are not completely avoidable; hence, an efficient system must be put in place to address those issues. Section 254C (1) of the 1999 Constitution (as amended) grants exclusive jurisdiction to the National Industrial Court over matters relating to OSH. This is also the position of the LSHW Bill. Directing OSH related cases to a single specialised court has its pros and cons. Used carefully, the approach could significantly reduce the usual litigation delays seen in regular courts, which is good for the OSH regulatory purposes. However, left with no commensurate capability in terms of staffing, funding or otherwise, it could stand as one of the weakest links in the OSH regulation process with huge negative consequence on the entire regulatory regime.

Success of OSH regulatory and enforcement framework is commonly measured in terms of its ability to reduce human vulnerability (fatalities, injuries and loss time injuries), environmental damage and commercial losses to a tolerable level and without entailing disproportionate costs. An effective OSH legal framework should be designed to ensure that healthy and safe workplaces, and a compensation and rehabilitation system, which ensures that no worker is disadvantaged should they be injured at work. An effective OSH legal framework should spell out commensurate penalties to defaulters and grant the inspectors adequate, but controlled, powers to enforce its provisions. To avoid jurisdictional conflicts among related agencies, the law should also clearly define the scope of the OSH management authority.

Government in Nigeria has demonstrated a shocking lack of commitment towards effective OSH regulation. It is more than four years since the National Assembly passed the LSHW Bill, yet it still awaits presidential assent. Every moment that the construction industry or other workplaces remain unrecognised by unenforceable OSH regulations, or the penalties for violation remain insignificant, more injuries, fatalities and accidents occur.

However, the responsibility rests on the government to improve the state of OSH in Nigeria, along with active participation of the trade unions, professional bodies, educational institutions and the employees and employers. Above all, the proactive and collective participatory approach to enforcement of OSH regulations should be practiced at an optimum level, requiring much more than enactment of laws and regulations.




Capital Market Disputes – The Appropriate Resolution Channel

capita-marketA Federal High Court in Lagos has struck out a N1.86bn suit filed against the founder of the Living Faith Church, a.k.a. Winners’ Chapel, Bishop David Oyedepo, by a stock brokerage firm, Valueline Securities and Investment Limited.

Justice Jude Dagat, in a ruling on Friday, described the plaintiffs’ suit as incompetent and dismissed it for want of jurisdiction.

Valueline Securities and Investment Limited and its Managing Director, Samuel Enyinnaya, had in February 2015 sued Oyedepo and his family for an alleged breach of contract in a N9bn stock market deal. Joined as the 10th defendant in the suit was the Security and Exchange Commission.

The plaintiffs, through their lawyer, Mr. Rickey Tarfa (SAN), sued for the enforcement of their fundamental rights and were claiming a total of N1.86bn from the defendants jointly and severally as professional fees and damages.

The plaintiffs, in their statement of claim, averred that Oyedepo, his family and organisations entered into an Investment Portfolio Management Agreement with them and appointed them as the portfolio managers to oversee and to ensure the profitability of the said investment worth about N9bn in the Nigerian Stock Exchange.

According to the plaintiffs, it was agreed that 2.25 per cent of the net asset value of the portfolio and an annual incentive fee of 10 per cent of the returns on the investment would be paid to the plaintiffs.

The plaintiffs said that in order to enhance the profitability of the investment, they obtained some margin loans from some Nigerian banks, which, they claimed,  turned out to be a great boost to the investment.

They however said trouble started “when Oyedepo wanted to buy his first private jet and the World Mission Agency Inc ordered the sale of majority of the securities in the investment portfolio, and that despite the professional advice to the contrary, the plaintiffs were made to sell the securities to raise the N3bn needed to buy the jet, a development which brought about huge losses to the investment.”

According to the plaintiffs, following the said sale of the shares coupled with the global economic meltdown which caused stock market across the globe to crash at the time, the N9bn investment recorded losses.

The plaintiffs, however, alleged that in a bid to avoid their financial obligations to the plaintiffs, Oyedepo and his organisations accused them of fraud and mismanagement and wrote a petition against them to the Economic and Financial Crimes Commission.

They however claimed that the EFCC found them innocent after six years of investigation after which Oyedepo further dragged them before the Nigerian Stock Exchange.

The plaintiffs alleged that the NSE unlawfully froze their business accounts and did not give them fair hearing. They had urged the court to order the NSE to immediately unfreeze their accounts.

They also sought the payment of N1.86bn as their professional fee and damages. But the Oyedepos, through their lawyer,  Mr. Chioma Okwuanyi, filed a preliminary objection and asked the court to dismiss the suit for lack of jurisdiction.

Contrary to the plaintiffs’ claim, Okwuanyi maintained that the losses recorded on the N9bn investment were due to the plaintiffs’ recklessness, adding that the margin loan they took was without the consent of the Oyedepos and that the loan was not channeled into his clients’ investment.

In the three-ground preliminary objection, Okwuanyi contended that by the provisions of Section 34 of the Investment and Securities Act, only the Investment and Securities Tribunal had the vested authority to entertain a dispute between a capital market operator and his client and not a Federal High Court, to which the plaintiff had brought the matter.

The lawyer further argued that the plaintiffs’ suit, as constituted before the Federal High Court, was premature, as the plaintiff had yet to explore all the internal dispute resolution mechanism within the NSE before heading for the court.

In its own objection, the NSE, through its counsel, Mr. M.O. Liadi, also contended that the plaintiffs ought to have approached the NSE council to ventilate their grievances rather than rush to the Federal High Court.

“Given the complaints of the plaintiffs against the decision of the applicant, the plaintiffs ought to have approached the applicant’s council and if still unsatisfied, the plaintiff is obliged to proceed to the Securities and Exchange Commission.

“If still unsatisfied, by the provisions of sections 284 and 289 of the Investment and Securities Act, the plaintiffs are permitted to proceed to the tribunal. We submit that the plaintiffs have failed to do this,” Liadi contended. In his ruling on Friday, Justice Dagat upheld the defendants’ preliminary objections and dismissed the plaintiffs’ suit.

The judge agreed with the defendants that  the plaintiffs ought to have taken their case before the Security and Investment Tribunal rather than the Federal High Court.

The judge also held that the plaintiffs failed to exhaust the internal dispute resolution mechanism provided in the Security and Exchange Commission before resorting to a legal action.

The judge held, “On the whole, I hold as follows: This suit is based on a simple contract between the plaintiffs and the 1st to 10th defendants, which the Federal High Court has no jurisdiction to entertain.

“The plaintiffs have not complied with the pre-action requirements of the 11th defendant under its rules and the Investment and Securities Act 2007. Even after satisfying both requirements, the appropriate venue to institute this action is the Investment and Securities Tribunal.

“The preliminary objection filed by the 1st to 10th defendants/applicants and that filed by the 1th defendant/applicant have merit. This court declines jurisdiction to entertain this suit. The court cannot further transfer the suit to the Investment and Securities Tribunal because even the pre-action requirements have not been satisfied. The suit is hereby struck out” the Court said.

Source: Punch


Banks to pay for fraud on mobile money transactions – CBN

banking-financeCustomers who lose money to fraudsters through the mobile money-driven Unstructured Supplementary Service Data (USSD) banking will be reimbursed by their banks, the Central Bank of Nigeria (CBN) has said.

The USSD Banking platform allows customers to transfer money to third party, buy airtime, open accounts, pay bills and book travels, among other services, using their mobile phones, but the level of customer protection is still below regulatory threshold.

CBN Director, Banking and Payments Department, Mr ‘Dipo Fatokun, said the apex bank reviewed the process of USSD deals and directed banks to allow their customers transacting through the platform to use a Personal Identification Number (PIN) instead of the last four digits on their Automated Teller Machine (ATM) cards. He spoke at a forum organised by financial correspondents in Lagos.

Banks are yet to perfect the security around the USSD transaction plan. They are not providing additional security, such as allowing PIN into the transaction process as against the current practice whereby customers rely on the last four digits of their ATM cards for transactions. This has resulted in many customers losing their money to fraudsters or people who have access to their ATM cards.

Speaking on the theme: “Recent developments in the electronic payments system and implications for consumers of electronic payment services,” Mr Fatokun said: “We have reviewed the process of USSD and instructed banks that they must use a PIN. It is possible for people to come in contact with your phone, and also come in contact with your ATM card and so, use the last four digit of your card as PIN and that is dangerous. Give a customer a PIN, which is known only to him. One of the banks, I won’t mention names, told us they needed to do system configuration, to ensure that customers can use one time password (OTP) or give the customer password or a token.”

Mr Fatokun said until the banks are able to provide OTP or token to customers transacting through the USSD platform, they will bear the cost of any loss of funds through the process.

“Meanwhile, until that is done, the banks assured us, in writing, that any customer that suffers losses, they would pay. So, if you have cases of people who have suffered losses on USSD platform and their money has not been refunded, let us have it,” he said.

CBN data showed that about N40 billion transactions pass through the mobile money network monthly. It also showed that although e-fraud rate in terms of value dropped by 63 per cent last year, after the Bank Verification Number (BVN) introduction and improved collaboration among banks via the fraud desks, the total fraud volume rose significantly by 683 per cent within the year compared to 2014 figures.

Also, the country experienced 3,500 cyber-attacks with 70 per cent success rate and loss of $450 million within the last one year mainly through cross channel fraud, data theft, email spooling, phishing, shoulder surfing and underground websites.

Source: Today


FIRS Grants Waivers on Penalty and Interest on 2013-2015 Tax Liabilities

downloadAs part of the efforts of the Federal Inland Revenue Service, (FIRS) to provide voluntary compliance and shield taxpayers from the burden of carrying forward old tax liabilities arising from penalty and interest, the service wishes to announce as follows:

1.       That the FIRS in exercise of its powers under Section 85 (3) of the Companies Income Tax Act CAP C21 LFN 2007 (as amended) (and replicated in Section 32(3) of the Federal Inland Revenue Service Establishment Act (FIRSEA 2007) hereby invites all principal officers, especially Chairmen, Managing Directors, Chief Executive Officers, Executive and Non-Executive Directors, Chief Financial Officers and all company owners or their representatives to take advantage of a Special Window to avoid payment of penalty and interest on tax between 2013-2015.

2.      That FIRS, by this Public Notice, will grant a pardon stretching back to three years (2013-2015) to ALL TAXPAYERS in default provided that such defaulting taxpayers:

(a)  Come forward to declare their indebtedness within the 45-day window

(b)  Present a payment plan on the outstanding Principal Tax Liability acceptable to the Federal Board of Inland Revenue;

  1.  That this Special Window will be opened for 45 days ONLY, commencing from 5th October 2016 terminating 24th November 2016;
  2.   That this waiver relates ONLY to accumulated penalty and interest and not principal tax due;
  3. Based on this waiver, part payment/full payment of undisputed tax liabilities should be  paid, while the balance can be paid instalmentally, however, it is expected that a reasonable amount of not less than 25 per cent should be paid on account;

    By this Public Notice, FIRS invites taxpayers who have not been fulfilling their tax obligations to take advantage of this Special Window, failing which all legal means at the disposal of the FIRS will be deployed including criminal prosecution of the Board and Management of defaulting organization.

    Applicants who want to take advantage of this Special Window should forward their applications to:

    Office of the Executive Chairman
    Federal Inland Revenue Service, FIRS
    20 Sokode Crescent
    Wuze Zone 5

Categories of Benefits Payable under the Contributory Pension Scheme


Pension is a retirement plan that requires employers/employees to make contributions into a pool of funds set aside for the workers’ future benefits.  There are two main types of pension plans: defined-benefit plans, and defined-contribution plans. The former provides a specified payment amount in retirement, while the latter allows employees and employers to contribute and invest funds over time to save for retirement. Increasingly, employers are opting for defined contributory plans over defined benefit plans, primarily due to the expense and long-term obligations associated with running a defined benefit plan. The Pension Reform Act 2004 (amended in 2014) introduced the Contributory Pension Scheme (CPS) as a defined-contribution pension plan to replace the old system of defined-benefit that was in operation and mostly for the benefit of only public sector workers. The inadequacies of the erstwhile system of administration of retirement benefits in Nigeria are well documented. Under the CPS administration of retirement benefits is much better structured and organized.

The following categories of benefits are payable under the CPS:

Retirement Benefit – This mode of benefit is paid on attainment of the minimum pensionable age of 50 or 35 years in service. The Act provides that a minimum of 25% to a maximum of 50% of the RSA balance be paid to the retiree as a Lump Sum provided the available balance after payment of the Lump Sum can fund either a Programmed Withdrawal or Annuity Insurance retirement benefit financial option.

Temporary loss of job or early retirement benefit – Section 7 (2) of the Act provides that where an employee voluntarily retires or temporarily loses his job, the employee may, after four months, withdraw an amount of money not exceeding 25% of the total in his Retirement Savings Account (RSA). This benefit is only available once for every contributor, and is not available where the employee secures another employment within four months of the last one. The balance in the RSA would be available upon retirement or attaining the age of 50 years, whichever is later.

En-Bloc Benefit – This benefit is payable to RSA holders who have less than N550,000.00 (Five Hundred And Fifty Thousand Naira) in their RSAs upon retirement, as such an amount is considered too low to structure any type of periodic pension payment arrangement.

Voluntary Contributions – RSA holders who make additional contributions beyond the statutory 8% + 10%, are permitted full access to the amounts so contributed subject to the payment of tax on the income earned on such monies if withdrawn before 5 years from the date of contribution. See sections 4 (3) and 10 (4) of the Act.

Death Benefits – There are two types of death benefits payable under the CPS, namely death in service and death after service. Death in service is direct payment of Group Life Insurance claims to the named next-of-kin and subsequent processing of the RSA balance for payment. Death after service refers to payment of the residual balance standing to the credit of the RSA holder to his/her bona fide beneficiaries.

Equity Contribution for Payment of Residential Mortgage – This is a benefit in kind. Section 89 (2) of the Act provides that a Pension Fund Administrator may, subject to guidelines issued by PenCom, apply a percentage of an RSA balance towards payment of equity contribution for payment of residential mortgage on behalf of the RSA holder. The draft Guidelines issued by PenCom provide that a maximum of 25% of the RSA balance may be used for the equity contribution, and an RSA holder who benefits from this provision may not be entitled to a lump sum payment at retirement.

It is worthy of note that all classes of payments of benefits mentioned above are made via electronic transfers as a result of the robust and comprehensive registration and governance structures within the CPS. Needless to say that the gains so far recorded by the CPS are multiple. The administration of the Scheme since 2004 has addressed the trust deficit in the Nigerian pension industry, provided social security for many more people, created over 3,000 direct jobs, and contributed significantly to economic development in Nigeria.

Potential for growth of Nigeria’s pension industry is very high especially with more registrations expected from State Governments as well as the private and informal sectors into the CPS. According to data released by PenCom, a total of 169,647 CPS contributors from both public and private sectors have already retired and are receiving their monthly pension as and when due, and a total of N384.28 billion has been paid as pension with an average monthly pension of N6.15 billion.