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NPA clarifies issues of severance payments to disengaged workers’ in 2008

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The attention of the Management of the Nigerian Ports Authority (NPA) has been drawn to the above malicious and misleading news item making the rounds in the media at large.

In this respect therefore, management wishes to state categorically and unequivocally that the information is capable of derailing the company’s responsibilities to deliver corporate service to its large public.

That in the fulfilment of all reform preconditions, the May, 2008 rationalization was carried out based on the provision of the Public Service Reform guidelines. However, the process of concluding this exercise led to delay in the implementation of the monetization policy of the Federal Government.

Therefore, to comply with the preconditions, implementation of the policy commenced 1st July, 2008 after the May 2008 rationalization exercise. Agitation from the two house unions for payment of arrears on monetization based on the January approval date, resulted in the agreement to pay arrears of three (3) months to all existing employees from April to June, 2008 hence the two months’ arrears which was paid to them after their exit.

  1. In compliance with the directives of the Federal Government in the public service guidelines, those affected by the rationalization exercise were not entitled to the monetization and enhanced staff allowances as it was a precondition before implementation of the scheme thus the two months of monetization arrears paid to them was regarded as an error made and accepted in good faith.
  2. Entitlement paid to them are as listed below:

–       Three (3) months’ salary in lieu based on their salaries at the time of disengagement

–       Gratuity calculated in line with their salary at the date of exit, May 31st, 2008.

–       10% pension & gratuity as compensation due to reorganization was paid to them as provided for in the Pension Act (Decree 102 of 1979)

–       Pension Contribution remittance to their RSA

–       Accrued pension right remitted to their PFA/RSA using the Alexander Forbes actuarial valuation as at 31st May, 2008. The approved template by the Bureau of Public Service Reform and Federal Ministry of Transport was used for their payment.

–       Repatriation allowance was paid to them based on the components of the template from the Bureau of Public Service Reform Guidelines.

  1. Giving the foregoing, it is clear that their entitlements were fully paid based on the policy guidelines of the Federal Government Reforms programme. Further agitation by this group with intervention and negotiations from the in house Senior Staff Association led Management of Nigerian Ports Authority to consider some palliative measures without recourse to the issues that were earlier addressed (Pension, Gratuity and Repatriation) do not arise or is not of place.
  2. To finally address the matter and put it to rest, a 200% of one-year total emolument amounting to ₦770,386,586.22 (Seven hundred and seventy million, three hundred and eighty-six thousand, five hundred and eighty-six Naira, twenty- two Kobo) for the 530 earlier affected by the exercise was agreed with the group.
  3. Further to this, in October 11th, 2013 a joint Communique was reached on the final payment to the 2008 disengaged employees. It was then resolved that:
  4.         The issues raised about Pension, Gratuity and Repatriation have been addressed and final figures for payment to 2008 disengaged employees as agreed to the tune of ₦753,731,001.24 (Seven hundred and fifty –three million, seven hundred and thirty-one thousand one Naira, Twenty-four kobo for the final list of 517.
  5.     This constitutes the full and final payment to the disengaged employees of 2008.
  6. A letter of indemnity was duly signed by everyone of them before the amount due to each of them was paid. This arrangement was fully effected in December, 2013. There was no distortion of the content of the Joint Communique as alleged, the signing was done openly and transparently. Some of the executives of the group were signatories.
  7. It should also be noted that the Pension Reforms Act of 2004 which became fully effective from 3rd July, 2007 affected those who left service thereafter. They all enrolled with different Pension Fund Administrators where their accrued/contributory pension deductions had been paid and accessed by them. They exited in May, 2008, four (4) years after the full implementation of the new pension Act, 2004 and one year after the expiration of 3 years grace given to those who had 3 years and below to retirement on the old scheme.
  8. Part 1. sub section 8(i) of the Pension Reform Act, 2004 states: notwithstanding the provisions of subsection (2) of section I of this Act, any employee who at the commencement of this Act (25th June, 2004) is entitled to retirement benefits under any Pension Scheme existing before the commencement of this Act but has 3 or less years to retire shall be exempted from the scheme. From the foregoing, the 3 years elapsed on 3rd July, 2007.
  9. In view of the above, it is pertinent to the state that the May, 2008 disengaged employees are not part of the Defined Pension Scheme which effectively ended on 3rd July, 2007 as they were enrolled in the New Contributory Pension Reform Scheme with all remittance to their Pension Funds Account Managers made.

In conclusion, as a responsible Corporate entity of government with regards to the statutes, extant regulations and laws of the land, the Nigerian Ports Authority (NPA) reiterates its firm resolve at prioritizing the welfare of its staff.

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