Oil Industry Pension Crisis: PENGASSAN Raises Alarm Over Retirees’ Declining Benefits
Nigerian oil and gas sector retirees are facing severe economic hardship as their pension values continue to deteriorate amid rising inflation and currency devaluation, according to the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN).
At a recent stakeholders’ meeting focused on closed pension fund administrators (CPFAs), PENGASSAN President Festus Osifo highlighted the critical situation facing industry pensioners, particularly those who retired under defined benefit schemes decades ago. “We have observed with deep concern that many of our retirees are going through hardship because their pensions have remained static for years,” Osifo stated.
The union leader pointed out that approximately 90% of closed pension schemes maintain fixed benefit levels, leaving retirees dependent on management discretion for any increases. This affects workers who retired as far back as 1990, whose monthly payments have lost significant value over time.
PENGASSAN is now calling on major industry players, including Chevron, TotalEnergies, ExxonMobil, and the Nigerian National Petroleum Company Limited (NNPCL), to reassess their actuarial assumptions and implement fair pension adjustments.
The National Pension Commission (PenCom), represented by Director-General Mrs. Omolola Oloworara, affirmed its commitment to maintaining stability and transparency in CPFA operations. Speaking through Mr. Abdulqadir Dalhatu, Head of Investment Supervision Department, PenCom outlined new supervisory mechanisms and compliance frameworks to protect contributors’ funds.
TotalEnergies CPFA Managing Director Benjamin Okeke-Agedi, represented by CFO Wale Olasoji, emphasized the advantages of CPFAs in investment flexibility and portfolio diversification. He advocated for technological innovation, including artificial intelligence for portfolio optimization, and stressed the importance of incorporating environmental, social, and governance (ESG) principles in pension fund investments.
The stakeholders’ meeting concluded with calls for collaborative effort among employers, regulators, and unions to ensure sustainable pension management and protect retirees’ interests. PenCom acknowledged the challenges posed by economic factors and indicated it is exploring measures to better protect retirees’ purchasing power.
This pension crisis highlights the broader challenges facing Nigeria’s retirement system as it adapts to modern economic realities while trying to protect the welfare of former oil and gas industry workers who contributed to the sector’s development.
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