he National Pension Commission (PenCom) and ARM Pension Managers have appealed against the judgment that legitimitises 50 per cent lump sum for retirees.
An senior officer in the pension industry, who spoke on condition of anonymity, said the Commission has also obtained a stay of execution on the judgment.
The appeal and stay of execution order are coming on the heels of a judgment by Justice Oyebiola Oyewumi of the National Industrial Court (NIC), Abuja Judicial Division in the case a 63-year-old retiree, Mr. Maroof Giwa v. ARM Pension Managers and the National Pensions Commission.
Giwa sought the order of the court to claim 50 per cent lump sum from his pension as against the 25 per cent stipulated by the Pension Reform Act (PRA), 2014, which pension managers pay.
The retiree claimed that the computation of the lump sum/benefits by the defendant done on the 25 per cent was illegal.
He argued that he could not be treated like a retiree as he quit service voluntarily and that he’s above 60 and would want to withdraw 50 per cent or 75 per cent of his pension.
Delivering her judgment, Justice Oyewunmi granted Giwa’s prayer.
She said the norm should be broken for Giwa, considering his age, and the life expectancy of male Nigerians as projected by World Health Organisation (WHO).
She held that 25 percent lump sum calculated by the Arm Pension Managers was unlawful.
She said the 25 percent withdrawal stated in the Pension Reform Act is for a retiree who retired at 50. The provision, she said, does not apply to Giwa.
However, Arm Pension Managers, argued that the claimant had no case.
Its counsel, M. Abdulraheem, submitted that the PenCom only guarantees a 25 per cent lump sum.
He submitted that to allow the claimant argument would amount to tinkering with an Act of the National Assembly and that it would enable not only the claimant but also other RSA holders determine what should be paid to them.
He said doing so would amount to usurping the powers of the second 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.
Also, PenCom counsel E. O. Awa argued that the Act did not provide for a lump sum of 50 per cent, 65 per cent, 75 per cent or 25 per cent except 25 per cent for an employee who retires before 50 or disengages from employment.
But Justice Oyewumi held that 60 years and above was not in the spirit of Section 7(2) of the Act that specifically made provision for a 50-year-old retiree to withdraw 25 per cent lump sum.
Some observers have, however, said the judgment took advantage of what seems like ambiguity in the law, citing Section 173 of the Constitution, Section 7(1) and (2) as not stating that it applies to retirees who are over 50.
Some experts, however, disagreed, stating that there was no ambiguity.
A chief executive officer, who spoke on the condition of anonymity, said: “While some retirees want 50 per cent, 75 per cent or all their pension to be given to them at a go, others believe the 25 per cent is okay as it will allow them to receive monthly or quarterly pension, which is like salary.
“In any case, it is best to leave the matter to the courts to decide and interpret the law. Ultimately, PenCom approves percentage payouts as they are empowered to by law. We all want immediate gratification which is human nature. And it is more pronounced in a country with very little saving culture. This attitude to savings is further exacerbated by our vey challenging economy. We need to continue to dialogue and hopefully find a middle ground that works most. Pension operators need to lead a campaign to sensitise the public on the objectives of the PRA, such that the stakeholders will see that it was created in their interest,” he added.