BPE Denies Holding Back N27bn PHCN Pension Premium

Chima Akkwaja

The Bureau of Public Enterprises (BPE) has distanced itself from the huge outstanding insurance premium of staff of the Power Holding Company of Nigeria (PHCN) who died in active service.

The Bureau confirmed there is outstanding premium of about N27,188,232,208.20 for which payment has not been made.

According to the agency, the provision of group life insurance policy for employees is mandatory and compulsory under section 4(1) (5&6) of the Pension Reform Act 2004.

The maxim of “no premium no cover” does not apply here where the law explicitly provides, “Every employer shall maintain group life insurance policy in favour of each employee for a minimum of three times the total annual emoluments of the employee and premium shall be paid not later than the date of commencement of the cover’’.

Thus, PHCN successor companies as employers of labour before privatisation were mandated by law to provide these classes of insurance to its employee in compliance with the Pension Act, it said in a statement signed by Alex Okoh, BPE head of public communication.

Giving a breakdown, Okoh said, “It was established that there was an insurance policy between GNIP and PHCN. Premiums were outstanding for year 2011/2012 amounting to N13,607,151,141.10 and renewable for the year 2012/2013 at the sums of N13,581,080,774.10, totaling N27,188,232,208.20 for which payment was outstanding.

PHCN had already filed claims with GNIP for 267 staff that died in active service for compensation to the relations/widows of the deceased. GNIP did not pay the claim because PHCN did not pay premiums due for 2011/2012 and 2012/2013” the statement said.

However, PHCN submitted these claims to the Implementation Committee set up by the National Council on Privatization for the processing of entitlements to PHCN Staff that then made representations to the then Minister of Power.

The Minister of Power presented the matter to the Vice President in a memo dated 23/12/2013. It was subsequently presented to and approved by the National Council on Privatization at its 3rd meeting held on August 4th, 2014, for payment.

BPE transferred the sum to the Office of the Accountant General of the Federation for further action.

“As mentioned earlier, at a special meeting held, on January 12, 2013 the NCP set up an Implementation Committee, chaired by the Minister of State for Power to handle the processing and payment of entitlements of PHCN Staff based on the approvals given at the same meeting.

This Implementation Committee chaired by a Minister comprised of representatives of various Ministries and Agencies, was superior to BPE management. Thus no single one of the forty tranches of payments to PHCN Staff ever came to the BPE management for consideration, BPE explained.

Speaking further, Okoh noted that once the implementation Committee processed and verified PHCN Staff entitlements, it advised BPE and BPE remitted the relevant sums to the office of Accountant General of the Federation that effected payments as appropriate.


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