The management of Lagos State University (LASU) diverted N198 million it illegally withdrew from the contributory pension of the institution’s employees to purchase 12 luxury vehicles for members of its top echelon, a PREMIUM TIMES investigation has revealed.
The management also used an additional N83.37 million from the same fund to buy four buses, documents obtained by this newspaper revealed.
The N281 million was part of N474 million withdrawn in October 2018 purportedly to finance the National University Commission’s (NUC) accreditation of some academic programmes in the university. Nigeria’s pension legislation prohibits such withdrawal.
The management of LASU collects pension contributions of staff members and remits them to Pension Fund Administrators (PFAs). However, a good percentage of the university’s employees are not registered with any PFA.
PREMIUM TIMES learnt that those without PFAs wanted their pension funds to be administered by the Nigerian University Pension Management Company (NUPEMCO), which was only licensed National Pension Commission PENCOM in February after a nationwide strike by university lecturers, ASUU.
For those employees awaiting the registration of NUPEMCO, the university kept their pension contributions in an escrow account, a practice that PENCOM said negates pension regulation.
“There is a regulation that when employees do not open a retirement savings account, the organisation has the liberty to approach a pension fund administrator and transfer those funds there. Those funds will be kept in what we called a Transitional Contributory Fund Account pending when they open a retirement savings account,” Peter Aghahowa, spokesperson for PENCOM, told PREMIUM TIMES.
“The account is domiciled with the PFA. The whole idea about the regulation is that the account should not be domiciled with the employer because, no matter if it is placed in an escrow account or not, there is the tendency of those funds being used when there is pressure.
“From the little I have heard, quite clearly, the university didn’t follow the regulations through. The things they ought to have done, some of them they didn’t do,” he added.
Section 60, subsection 2 and 3 of the Pension Reform Act, 2014 buttresses the explanation of Mr Aghahowa.
“All companies and institutions already engaged in the management of pension funds who are not licensed by the commission shall, at the commencement of this Act, compute and credit all contributions to Retirement Savings Account opened by them for each contributor including distributable income,” it says.
“All companies and institutions referred to in subsection (2) of this section shall transfer all pension funds and assets held by them to Pension Fund Administrators and Pension Fund Custodians as may be determined by the Commission.”
Also, Section 70 subsection 2 of the Pension Reform Act 2014 forbids a custodian of workers’ pension – LASU management in this case – from using the pension to meet its own obligations.
“The Pension Fund Custodian shall not utilise any pension fund or assets in its custody to meet its own financial obligations to any person whatsoever,” the section of the act stated.