PenCom secures stay of execution on 50% lump sum
The National Pension Commission (PenCom) has secured a stay of execution and appealed the judgement given by Justice Oyebiola Oyewumi of the National Industrial Court, Abuja Judicial Division which ordered ARM Pension Managers one of the nation’s Pension Fund Administrators (PFAs) to pay a retiree, Maroof Giwa, at least 50 per cent lump sum of his pension.
PenCom’s spokesman, Peter Aghahowa, who said this in a telephone interview, told Inspenonline that having secured the stay of execution, the commission has gone ahead to appeal the judgement.
According to the Pension Reform Act (PRA) 2014, Pension managers at the moment use four perimeters to determine lump sum. They include: Retirement Saving Acount balance as at the time of retirement; worker last salary; age and sex. These variable often amount to what is taken to be 25 per cent, which may not be so.
PM News reported that Justice Oyewumi has said the norm be broken for Giwa, considering his age, and the life expectancy of male Nigerians as projected by World Health Organisation.
The Court held that 25 per cent lump sum calculated by the Arm Pension Managers as claimant’s pension is unlawful.
He said that the 25 per cent withdrawal as clearly stated in the Pension Reform Act is in respect of a retiree who voluntarily retired at age 50. The provision, she said is not applicable to Giwa.
Maroof Giwa had approached Arm Pension Managers to apply for pension and withdrawal benefits but the PFA offered to pay 25% of his total retirement savings which he rejected.
He demanded 50 per cent of the total sum. The claimant claimed that the computation of the lump sum/benefits by the defendant done on the basis of 25 per cent is unknown to the law.
He argued that he cannot be treated like a retiree who retired voluntarily and that he’s 60 years and above and would want to withdraw 50% or 75% of his total pension.
Arm Pension Managers, the defendant in this case, submitted that the claimant has no right and his statement of fact discloses no reasonable cause of action against it.
Its counsel, M. Abdulraheem Esq submitted that the template as provided by the 2nd defendant-National Pensions Commission only guarantees a minimum 25% lump sum payable.
He said paying a higher percentage lump sum (to the maximum of 50%) is dependent on several variables.
He submitted that to allow the claimant argument as per his claims will amount to tinkering with an Act of the National Assembly and it will allow not only the claimant but any other RSA holder determine what should be paid to him or her.
He said doing so would amount to usurping the powers of the 2nd defendant as stipulated by law that the withdrawal of lump sum is an option predicated on the condition that the residue in the RSA would be sufficient to procure funds withdrawals or annuity.
National Pensions Commission Counsel E.O Awa argued that the Act did not make provision for a lump sum of 50 per cent, 65 per cent, 75 per cent or 25 per cent except 25 per cent lump sum on request to any employee that retires before the age of 50 years or disengages from employment.
But Justice Oyewumi held that the age category of the claimant 60 years and above was not in the contemplation of Section 7(2) of the Act that specifically made provision for a 50-year-old retiree to withdraw 25% lump sum.