Panel Set Up By FG Uncovers £2 Million PHCN Fund In Barclays Bank

An investigative panel set up by the Federal Government to audit the controversial Power Holding Company of Nigeria (PHCN) Superannuation Pension Fund has discovered that parts of the company’s pension is stashed away in a bank in the United Kingdom (UK).

The amount, totalling £2,204,814.18, which has been in Barclays Bank for about 21 years, was discovered to have accumulated from pension deposits for expatriate workers of the power utility and was believed to have been transferred by its officials long before the National Electric Power Authority (NEPA) metamorphosed into PHCN.

The panel’s report also indicates that PHCN has in the past 21 years failed to fund its in-house pension scheme, thus putting the future of its retiring workers in jeopardy. It disclosed that the company has no money to fund the pension scheme.

It was, however, not clear if PHCN was allowed under the laws governing such government entities to keep such accounts.

But the chairman of the eight-man audit panel on PHCN pension, Mr. Joseph Ajiboye, who is also a former Auditor-General of the Federation (AGF), said that the panel could not ascertain if officials of PHCN had continued to remit pension and gratuity deductions to the foreign account, considering that the last expatriate pensioner of the utility is reported to have died.

Ajiboye, in the summary of the panel’s findings, which he presented to the Minister of State for Power, Mr. Darius Ishaku, Monday in Abuja, explained that its consideration of various financial audits of the in-house pension scheme of the company, showed that the failure to fund the scheme was based on the excuse that PHCN (or NEPA) has perpetually operated at a commercial loss, especially within the period under review.

He noted that financial audits of the scheme from 1990 to 2010, which it studied in a bid to ascertain transactions in the account, showed that from 1990 to 1999, a total of N1,787,919 was paid out as pensions and gratuities to workers, while N51,279,940,138 was paid out from 2000 to 2010.
He said financial documents which the panel studied had shown that a total of N53,670,859,138 was paid out as pension and gratuities to PHCN workers within these periods, adding that an actuarial sum of N107 billion was equally set aside by the utility as a contingent sum.

The panel also discovered that some of PHCN assets, which were assigned to fund the pension scheme, had been purportedly sold off.

Following allegations of the illegal operation and deductions from the in-house pension scheme that runs contrary to the extant pension law, the former Minister of Power, Prof. Bart Nnaji, had set up the panel with a 30-day deadline to investigate the status of the pension fund in the power sector vis-à-vis the pension laws.

The panel recommended, among other things, that a full audit of accounts of PHCN successor companies be carried out to ascertain the extent of accountability with the funds given to them by the market operator.

Ishaku, after the briefing, thanked the panel, which he noted had done a thorough job that would fast track negotiations with PHCN unions on the privatisation exercise.

PHCN has for years operated an in-house defined pension scheme known as the superannuation pension fund, with only the management and leaders of its trade unions as its trustees, an arrangement that runs contrary to provisions of the Pension Reform Act, 2004.