Governor Adams Oshiomhole of Edo State has clarified his position on the pension fund over which he made comments during the week.
Oshiomhole said he never accused the Pension Commission of diverting N3.5 trillion pension fund because it has nothing to do directly with pension money in the first place.

He said, rather, his position is about how pension funds operators invest hard-earned workers’ money in Federal Government of Nigeria Bonds and Treasury Bills, which in turn was grossly mismanaged through funding consumption.
In a statement personally signed by him, Oshiomhole said: “Recently, a section of news media attributed comments to me regarding the way and manner in which pension funds to the tune of 3.5 trillion Naira were drawn down to support recurrent expenditure and not infrastructure development. In the said reports, the impression created was that I had accused the National Pension Commission (PENCOM) of colluding with the Federal Ministry of Finance to divert the said amount.

“Considering the manner in which this serious economic issue that borders on the future of the Nigerian economy and the welfare of the Nigerian workers who make contributions to the pension funds, is being misrepresented and trivialized in the media, I wish to make some clarifications and set the record straight.

“As someone involved from the outset in the crafting of the PENCOM Act, I am very much aware that under the law, PENCOM is a regulator of the financial institutions and operators that deal directly with the management of the pension funds and pension assets, namely: the pension funds administrators (PFAs) and the pension funds custodians (PFCs). I could not have said therefore that PENCOM diverted pension money because it has nothing to do directly with pension money in the first place.

“Indeed, I recall that when the pension reforms, which led to the creation of PENCOM were being formulated, the selling point of the contributory pension scheme was that pension funds should be source of cheap and long-term funds that would be used to support programmes and investments that will enhance workers welfare such as workers’ housing and the creation of a robust mortgage system.

“However, what turned out in the management and operations of the pension funds was a completely different ball game. It is open knowledge that the PFAs are among the major subscribers of Federal Government of Nigeria (FGN) Bonds and Treasury Bills, which are instruments of FGN’s domestic borrowing, issued periodically by the Debt Management Office (DMO) and the Central Bank of Nigeria (CBN) respectively, on behalf of the Federal Government. FGN Bonds as debt securities are generally considered safest relative to other debt instruments in the capital market because they are governed by the “faith and credit” principle; offer attractive rates and guaranteed returns, at least in theory.


“It is, therefore, not a new revelation that total subscriptions of pension funds to the FGN Bonds are in excess of 3.5 trillion Naira or about 70% of the total funds (estimated at 5.1 trillion Naira) so far accrued under the contributory pension scheme. It is also not a secret that in the last five years under the previous administration, the Federal Government had engaged in monthly bond issuances as a means of raising finance to fund recurrent expenditure and service domestic debts, rather than finance capital projects, which was the main purpose of bond issuance if domestic borrowing was to be a productive and beneficial activity to the national economy. These are facts that could easily be verified from the PFAs and PFCs; DMO, Securities and Exchange Commission, as well as CBN, if journalists and the media they represented have gone the extra mile to find out.

“The issue clearly was not about PENCOM diverting pension funds. It was about how pension funds operators invest hard-earned workers’ money in FGN Bonds and Treasury Bills, which in turn was grossly mismanaged through funding consumption (recurrent expenditure, payment of salaries for federal employees, financing budget deficits and domestic debt servicing) rather than concrete investment in critical infrastructure, housing, etc. Pensions as workers savings, rather than being invested in capital projects with multiplier effects on jobs and incomes, are being invested in bonds which go into funding wasteful recurrent spending. Spending borrowed money on unproductive ventures typically generates inflationary pressures that lead to devaluation of the currency and purchasing power of workers. The net effect is that by the time these savings are required to pay pensioners in the future their real value would have been eroded quite significantly. As we have seen even in advanced economies, such kind of mismanagement of pension funds had easily sparked economic crisis that undermined the welfare of workers and retirees.

“I have followed the recent World Pensions Summit organized by PENCOM and all through experts and analysts kept emphasizing that pension funds should be invested in infrastructure like roads, power and other productive ventures to develop the national economy. The point here is that pension funds should not be invested in instruments that mobilize funds only for unproductive and wasteful ventures.

“It is in the public domain that federal budgets in the last four years have devoted as much as 85% of the budgetary outlay to recurrent expenditures including salaries. The National Assembly on whose onus rests the approval of the budget has been lamenting year-in-year-out, this clearly bad economics, a situation in which only a paltry 15% of the budgetary outlay was devoted to capital projects and investment in the last five years. Federal legislators have also openly complained about the fact that even the 15% capital expenditure is hardly executed fully, implying that the amount devoted to recurrent expenditure will be even much higher than the 85% reported officially.

“Based on the foregoing, let me reiterate that nothing I have said about pension funds and how they have been managed in the last five years is new. Everything I have said is in the public domain and can be verified. It behooves the media and journalists to refrain from twisting and misrepresenting critical national issues such as this one, so that they will not give individuals or institutions that mismanage the national economy an escape route to divert attention or muddle-up the issues. This is a responsibility we all owe Nigeria and the future generations.”

https://www.today.ng/news/22850/i-didnt-say-pencom-diverted-n3-5t-pension-fund-oshiomhole/

There is nothing you will say that will make any sense now. You have mouth diarrhea. Its best you get busy with your work as a Governor and stop all these needless publicly.

Was he sleeping

Oshiomole should reduce the way he talks nowadays, he is just making it hard for people to believe what he says!
ALTHOUGH, I AM NOT IN SUPPORT OF THOSE PDP HOOLIGANS AND THEIR ALMAJIRI FOLLOWERS THAT HAVE LOOTED THE COUNTRY DRY!

Not his fault, lie is in their blood... or is he not in APC

Ode. He is making a U-turn after been disgraced.

Na wetin Lara dey give this guy chop?

Of course he's making sense but he too initially meant to use it to score political points.

We know the GEJ govt was financially reckless and he's regaled us with enough details of that. Now what Nigerians wish to hear is how your committee plansnto go about remedying the situation.

Stop talking.....instead concentrate on fashioning out ways to clear the mess

The problem is you talk too much, thus you prone to say rubish.

Oshiomole, can your shut your dirty mouth up, please?

Noise maker.... please stop disgracing Iara

and this are the type of people who want to rule Nigeria by power by fire.
to know more about Apc read my signature

Park for one side guy, guy lacks moral and personal integrity.

Osho, Go and Die we need no explanations.
We have not forgotten how you treated the edo widow and later made a u turn after public criticism.

Like Mr President, Oshiomole has being firing on all cylinder, that only himself and Mr Buhari are not corrupt.
As i did observe in previous post Oshiomole will soon be out of office, so he needs a Ministerial post to keep him in public limelight and to take care of Lara, but more importantly to run as ElRufai's Vice in 2019, he is a fantastic dude but he is now a sycophant.

Stunned at the negative reactions to the clarification by Mr Oshiomole. Only one poster (theVOice) made reference to the substance of the post.

Is it wrong for Mr Oshiomole to bring to public domain the reckless spending of the last administration? Is it wrong for him to give a clarification when misconstrued?

I contribute significantly to Pension Funds monthly. I am equally concerned with every iota of news on the subject that will guarantee that the contribution is aptly being managed.

His explanation on the relationship between judicious use of invested Pension Funds in Government Financial Instruments and Time Value of Money is spot on.

My views though!

Foolish people are most times considered wise just because they are yet to utter a word..
Oshiomole pls learn how to hide ur stupidity by keeping quite..

[size=14pt]Is the Buhari/APC government going to default on the FG bond payment obligation?

What's Oshiomhole's own recurrent/capital expenditure budget ratio in Edo State for the past 6 years?

Has he spent all Edo revenue on capital expenditure now?

Did Oshiomhole utilize Edo bond on the projects it is meant for?[/size]