Regulator postpones former PHCN pensioners' upcoming benefits assessment until 2027

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Former employees of the defunct Power Holding Company of Nigeria will not receive another pension increase until January 1, 2027, the National Salaries, Income and Wages Commission has said, following a reassessment of records that altered their eligibility for recent pension adjustments.

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The commission said ex-PHCN retirees were initially included among beneficiaries of the 10.66 per cent and 12.5 per cent pension increases after information from the Pension Transitional Arrangement Directorate indicated that their last pension adjustment took place in 2010.

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However, in a letter sent to The PUNCH in response to enquiries over complaints by the retirees, the commission said further engagement with PTAD showed that the last pension increase received by the former electricity workers took effect from June 1, 2016.

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The letter was signed by the Head of Pension Management on behalf of the Acting Secretary to the National Salaries, Income and Wages Commission.

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The clarification followed a report by The PUNCH in April on complaints by ex-PHCN retirees, who accused government agencies of denying them pension increases approved for other federal pensioners and appealed to President Bola Tinubu to intervene.

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The retirees had argued that they were excluded from several pension reviews, including the 10.66 per cent, 12.5 per cent, 20 per cent and 28 per cent adjustments approved for federal pensioners. They said the delay in implementing the reviews had worsened the impact of inflation and rising living costs on their welfare.

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In its response, the commission said the retirees were initially captured as beneficiaries of the 10.66 per cent and 12.5 per cent pension increases effective from January 1, 2015, and January 1, 2020, respectively, based on information supplied by PTAD that their last adjustment occurred in 2010.

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“After some engagement with the Pension Transitional Arrangement Directorate, it was noted that the ex-PHCN retirees who were captured as beneficiaries of the 10.66 per cent and 12.5 per cent pension increase with effect from 1st January 2015 and 1st January 2020 respectively based on the assertion by PTAD that they had the last increase in 2010, actually had their last pension increase with effect from 1st June 2016,” the commission stated.

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The agency said the updated record affected the retirees’ eligibility for the earlier adjustments. “Based on that discovery, the ex-PHCN retirees were excised from benefiting from the pension increase conveyed by our letter in 2024,” the commission said.

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Instead, the commission said a 13.8 per cent pension increase was approved for the retirees with effect from June 1, 2021. It said the adjustment was calculated using the average inflation rate over five years and approved in line with Section 173(3) of the 1999 Constitution of the Federal Republic of Nigeria, as amended.

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The commission said the next pension review applicable to the retirees would take effect from January 1, 2027. “This implies that the next pension increase for these retirees will be 1st January 2027,” it stated.

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The dispute centres on the date used to determine the pension review cycle for former electricity sector workers. While the retirees maintain that they were denied increases granted to other categories of federal pensioners, the commission said the review timeline should be calculated from June 1, 2016, which it identified as the date of their last pension adjustment.

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The commission said the 13.8 per cent increase approved from June 1, 2021, was the appropriate adjustment based on that timeline, with the next review expected in 2027.

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The dispute involves former employees of the National Electric Power Authority and the Power Holding Company of Nigeria. NEPA was transformed into PHCN as part of Nigeria’s electricity sector reforms before the industry was later unbundled and privatised.

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Workers who retired before and during the reforms remained under the Federal Government’s Defined Benefit Scheme, where pension payments are determined by government-approved rules rather than individual pension contributions.

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PTAD was established to administer pension obligations for retirees covered under the Defined Benefit Scheme, while the National Salaries, Income and Wages Commission is responsible for salary structures and pension review frameworks for public sector workers and retirees.

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Questions remain over whether the 13.8 per cent pension increase approved from June 1, 2021, has been fully implemented and reflected in retirees’ monthly payments.

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The commission’s response places PTAD at the centre of the dispute over pension records, as it said its initial inclusion of the retirees in the earlier reviews was based on information supplied by the pension agency.

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PTAD’s clarification of the records and confirmation of whether the 13.8 per cent adjustment has been paid could determine the next stage of the dispute.

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