Fresh facts have emerged over why Lagos state Governor, Babajide Sanwo Olu’s proposed cancellation of pension payments to Tinubu, Fashola and Ambode.
Sources close to Alausa, Lagos state governor’s office informed New National Star explained that the governor is under pressure over the humongous pension packages paid to the former governors and their deputies after their tenors.
The Pension Reform Act of 2004 changed the Nigerian Pension system from Defined Benefits to Defined Contributions. Specifically, this means that private and public sector workers can only be paid pensions from the funds they contributed while in active pensionable work. But the salaries of Governors and their deputies are not subjected to pension deductions, their own pensions can only be fixed by the Revenue Mobilization, Allocation and Fiscal Commission (RMAFC).
Lagos State, being one of the States using Taxpayers money to make this illegal pension payment to non-contributing ex-governors/deputies which a source at The Nigeria Pension Commission, described as a case of robbing Peter to pay Paul informed the Commission’s objection to Lagos state raising N100billion Bond from the Capital Market in Jan 2020, the Nigeria Pension Commission disqualified the Bond from accessing pension monies in custody of the PFAs.
Sources claimed that the Lagos Government had to sign an undertaking to correct the illegal pension payment provisions in its pension law before the disqualification was lifted. Lagos was then able to borrow N100billion in Jan 2020 to spend on projects yet to be properly accounted for.
Justice Oluremi Oguntoyinbo of the Federal High Court had in his judgement in December 2019 in a suit filed by SERAP in 2017, ordered that the Attorney General of the Federation to challenge the legality of the pension payments to ex-governors and their deputies. The National Industrial Court in January 2020, also declared as null and void, payment of pension and gratuity to former governors and their deputies.
It was further gathered that Lagos State intends to borrow additional huge sums of money from the Capital Market again, but with a condition that it must cancel the illegal payments to governors/deputies by revoking Ex Governors Pension Law in order for PENCOM to qualify its new borrowing for PFAs’ investments.