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Union Bank: Ex-Staff Paid N12bn Gratuity, Pensions

Category: Investors NewsBeat

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Union Bank: Ex-Staff Paid N12bn Gratuity, Pensions

April 26 2010

Between 2000 and 2008, the management of Union Bank of Nigeria Plc paid retirement benefits, gratuity and pensions worth N12 billion to its 1,742 retired and disengaged staff. 

A source close to the bank told THISDAY that out of the amount, gratuities and other incentives to the former staff amounts to about N7 billion, while the remaining constitutes pensions being paid.Currently, about N1.1 billion is paid as pension to these former staff of the bank on an annual basis, the source said.

THISDAY further gathered that the bank currently remits contributions of the retired, disengaged and even serving staff to the 17 Pension Fund Administrators (PFAs) in the country. The contributions are being remitted in batches since the contributory pensions scheme commenced in the bank in January 2006. Some disgruntled former staff of the bank had last week protested at the head office of the bank to show their grievances against what they described as non-compliance by the management of the bank with some of the terms of the collective agreement with ASSBIFI.

In a swift reaction, the management of the bank noted that some of the issues raised by the “aggrieved” individuals who are purported to be pensioners of the bank were already a subject of litigation and this had been communicated to the representatives of the group previously.Contrary to the assertion by the former staff, the source explained that the bank had been in full compliance with the issue of NHF contributions, NSITF and PFA remittances.

In fact, contrary to the practice in the banking industry, the bank still also had all its ex-staff covered under its medical insurance scheme, a generosity that constitutes additional expense, the source said. The bank, while reiterating its commitment to dialogue as a means of fostering industrial harmony, noted that the current management of the bank came into office following the intervention of the Central Bank of Nigeria (CBN) in August 2009.

“Since then, the bank has not carried out any severance exercise and cannot indeed be held responsible for purported legacy actions taken by previous management, dating back over a decade,” a statement signed by the Group Managing Director of the bank, Funke Osibodu, on Monday, last week disclosed.


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