Recently, a bill for exemption of the Nigerian Police Force (NPF) from the Contributory Pension Scheme (CPS) like their military colleagues and the launching of police pension board was passed; this was not until after serious arguments between the police officers, and the National Pension Commission (PenCom) and pension fund operators. There was a strong opposition of the bill by PenCom, the Nigerian Labour Congress (NLC) and the pension operators. The bill was passed due to the claims of retired members being denied of their total accrued benefits.
Majority of the retired police officers argued that their individual salaries are very meagre and inadequate to live on, unlike their military counterparts. Some even lamented that they do not receive more than N30,000 ($39.8) as pension. Officers stated that the Contributory Pension Scheme tackles many challenges of previous pension schemes in Nigeria, but current PFA have not been able to tackle challenges in the Police Force. Some of these peculiarities include the pending reconciliation of police personnel data which is essential to obtaining the accrued pension from the Central Bank of Nigeria (CBN).
Experts say exemption of the police from CPS would affect the economy.
However, this attempt of the Nigerian Police Force to leave the CPS is not the first as there have been several attempts before now. Signing the bill into law has a likelihood of reversing the benefits of the pension reform process. Also, the federal government will become completely responsible for police pensions which, according to PenCom, would cost the government trillions of naira as time goes by. Prior to the establishment of the 2004 pension reform, this practice resulted in unfunded pensions and many pension liabilities which amounted to the fiscal debt of trillions of naira.
According to industry experts, the current state of the contributory pension scheme alongside total contributory pension scheme and Retirement Savings Account (RSA) with Pension Fund Administrators (PFA) would bear negative impacts that would affect the level of per capital income of every Nigerian. Official records of PenCom as at March 31, 2023, asserted that the estimated pension assets had increased to more than N15.58 trillion. The funds in this record is available to be borrowed by public and private sectors to finance infrastructure and investment to improve the economy.
Senator Ishaku Abbo agrees with the idea of exemption.
Reports have it that the single largest sum of the pension funds is contributed by police with its staff of about 320,000. Its contribution of pension funds is the reason why those who are against exemption of the police from the CPS emphasize the risk it poses to the financial system of the country. The Chief Executive Officer of PenOp, Oguche Agudah, stated that withdrawing Nigerian Police funds from the CPS would result in a burdened financial system, taking Nigeria back to the “dark ages” before pension reforms, because the nation’s financial ecosystem is linked.
Another financial analyst, Stephen Kanabe, asserted that there is a high tendency that it would be impossible to sustain the transitioning of the police back to a defined benefit scheme due to the country’s unstable economy. He stated that the transitioning would bring about loss in investments value due to forced sale. He described the move as “counterproductive”. On the contrary, Senator Ishaku Abbo believes that the difference in the contribution of pension savings and monthly pensions after retiring from active service between the police and other security agencies is enough reason for exemption of the police.
President Bola Ahmed Tinubu decides whether or not to assent the bill.
Industry experts who opposed exemption agreed that since the current system is not efficient enough, the pensions of officers from the rank of Assistant Inspector General of Police (AIG) upwards should be overseen under the category of political appointees whose retirements are with full benefits as affirmed in Section 6 (2) of the PRA 2014. Despite the debate over practicability and sustainability of the idea, the decision can only be made by President Bola Ahmed Tinubu, who can decide to assent to the bill or not.
Related Link
Pension Nigeria: Website
Bill to exempt the Nigerian Police from CPS – PenCom, NLC, pension operators and some industry experts opposed the bill. – Express your point of view.
The bill to exempt the Nigerian Police from CPS, PenCom, NLC, and pension operators has faced significant opposition from various stakeholders. The concerns raised relate to fairness, equity, the management and protection of pension funds, and the potential financial impact on the pension industry. It is now up to lawmakers and policymakers to carefully weigh these considerations before deciding on the fate of the bill.
I don’t think the police should be exempt from the CPS. It’s important to ensure that everyone has a pension and can retire comfortably, including those who work in law enforcement. Exempting the police could create an unfair system and harm the retirement savings of those who serve our country.
Judging by the fact that pension is meant to make a retired worker comfortable after servicing the country or the organization, passing the Bill to exempt the Nigerian Police from CPS will mean dashing their hope for the future after serving. The bill should be subject to review and critical decisions that will be in favour of the Nigerian Police Force and the country should be executed.
Either the police is exempted from the general pension mode or if there is a special one that is done for them, the important thing is they must receive pension. The government should ensure their pensions are being paid accurately.
Bill to exempt the Nigerian Police from CPS. All workers deserve pension after they have retired. Government should make sure that they are well settled on pension aspects
Police pension board passing should bring ease and regulate the system and replace the initial CPN system so as not to induce any unfairness practice.
The police shouldn’t be exempt from CPS. It’s crucial to make sure that everyone, including those who work in law enforcement, has a pension and can retire comfortably. Exempting the police might lead to an unfair system and jeopardize the retirement funds of those who serve our nation.
The main point is that the police must receive pension, whether they are exempt from the regular pension mode or whether a separate one is done for them. Their pensions should be paid appropriately, and the government should make sure of it.
Passing the Bill to exempt the Nigerian Police from CPS will likely destroy their hope for the future after serving, given that pension is supposed to make a retired worker happy after serving that will bringing something in for them The bill should be reviewed so the Nigerian Police Force can be benefiting pension
The several reasons given for the bill of exempting Nigerian Police from CPS to pass is understandable. The president Bola Tinubu should take a reasonable action that will be in the interest of the Nigeria Police Force. The police deserve the best after retirement from active service.