PENSION REFORM ACT 2014: the validity of its application.

The signing into law of the new Pension Reforms Act is a welcome development. Among other provisions, the Act is made applicable to employees in the public services of the states, some of which had established contributory pension schemes by virtue of state laws substantially similar to the repealed Pension Act.
In this article, I would be examining the competence of the National Assembly to legislate on matters relating to pensions for the Public Services of States and the validity, if any, of the Pension Reforms Act, 2014.

The Pension Reform Act, 2014 was signed into law on the 1st day of July 2014, repealing the Pension Act of 2004. By virtue of Section 2 of the Act, the Act is made applicable to employees in the Public Service of the Federation, the Public Service of the Federal Capital Territory, the Public Service of the States, the Public Service of the Local Government and Private Sector.

It is trite that the National Assembly is the highest legislative body in the Federal Republic of Nigeria, and, which is constitutionally empowered to make laws for the Federation or any part thereof. Section 4 (2) CFRN, 1999 (as amended) provides that: “The National Assembly shall have power to make laws for the peace, order and good government of the Federation or any part thereof with respect to any matter included in the Exclusive Legislative List set out in Part I of the Second Schedule to this Constitution”.

Section 4(3) of the Constitution goes on to provide that-

“The power of the National Assembly to make laws for the peace, order and good government of the Federation with respect to any matter included in the Exclusive Legislative List shall, save as otherwise provided in this Constitution, be to the exclusion of the Houses of Assembly of States”.

In the same vein, Section 4(7) (a-c) of the Constitution provides in favour of the State House of Assembly as follows:

“(7) The House of Assembly of a State shall have power to make laws for the peace, order and good government of the State or any part thereof with respect to the following matters, that is to say:

(a) any matter not included in the Exclusive Legislative List set out in Part I of the Second Schedule to this Constitution; [Underline mine]

(b) any matter included in the Concurrent Legislative List set out in the first column of Part II of the Second Schedule to this Constitution to the extent prescribed in the second column opposite thereto; and

(c) any other matter with respect to which it is empowered to make laws in accordance with the provisions of this Constitution”.

To resolve any conflict that may arise from the exercise of the various powers, Subsection 5 of Section 4 of the constitution is to effect that:

“If any Law enacted by the House of Assembly of a State is inconsistent with any law validly made by the National Assembly, the law made by the National Assembly shall prevail, and that other Law shall, to the extent of the inconsistency, be void”.

In pari materia with Section 4(2) of the constitution, Item 44 of the Exclusive Legislative List gives the National Assembly powers to make laws relating to-

“Pensions, gratuities and other-like benefit payable out of the Consolidated Revenue Fund or any other public funds of the Federation”. [Underline mine]

It is worthy to note that the Constitution in Section 80(1) and 120(1) provides for the establishment of Consolidated Revenue Fund of the Federation and Consolidated Revenue Fund of the States respectively.

Section 80(1) provides that- “All revenues or other moneys raised or received by the Federation (not being revenues or other moneys payable under this Constitution or any Act of the National Assembly into any other public fund of the Federation established for a specific purpose) shall be paid into and form one Consolidated Revenue Fund of the Federation”.

Similarly, Section 120(1) provides that- “All revenues or other moneys raised or received by a State (not being revenues or other moneys payable under this Constitution or any Law of a House of Assembly into any other public fund of the State established for a specific purpose) shall be paid into and form one Consolidated Revenue Fund of the State”.

On closer look at Item 44 of the Exclusive Legislative List, it will be observed that, the extent to which the National Assembly can make laws relating to pension is limited to those persons who are payable out of the Consolidated Revenue Fund or any other public funds of the Federation.

Note that, Item 44 of the Exclusive Legislative List makes mention of only Consolidated Revenue Fund or any other public funds of the Federation. As such, the rule of interpretation “expressio unius est exclusio alterius” (“the express mention of one thing implies the exclusion of the other”) applies.

Section 4(7) (a) [supra], empowers House of Assembly of a State to make laws affecting matters not included in the Exclusive Legislative List. It is on the strength of this provision that the various States of the Federation validly established various Contributory Pension Schemes.

With regards to the applicability of the Act:

I am of the view, considering the provisions of the Constitution, that the Act is over-reaching with regards to its application. The power of the National Assembly to make laws relating to matters contained in Item 44 of the Exclusive legislative List does not extend to employees payable out of the Consolidated Revenue Fund or any other public funds of the State. Assuming otherwise would amount to adding to the clear and unambiguous letters of the Constitution.

As to the validity of the Act, the Act is (though, valid to the extent that it applies to those payable out of the Consolidated Revenue Fund or any other public funds of the Federation), invalid to the extent that it applies to employees in Public Services of the States who are payable out of the Consolidated Revenue Fund or any other public funds of the State. Thus, the act of the National Assembly to make the Pension Reforms Act of 2014 applicable to employees in Public Services of the States is ultra vires as stated in Item 44 of the Exclusive legislative List.

Written by:

Barr. Harvey A. Anyalewechi

lordharveys@gmail.com

All rights reserved.