The National Pension Commission (PenCom) has asked the Nigerian Senate to drop the proposal for the establishment of a Police Pension Board because the structure cannot be accommodated under the Contributory Pension Scheme (CPS) currently in operation.
PenCom made the call yesterday at a public hearing on Police Pension Board (Establishment) Bill, 2022 (Sb 1009) and Nigeria Police Special Forces (Establishment) Bill, 2022 (Sb 846) held by the Senate committee on Police Affairs.
A bill that was jointly sponsored by Senators Ishaku Abbo, representing Adamawa North and Mohammed Ali Ndume, Borno South is seeking the establishment of a Police Pension Board that will serve as an exit plan for the Nigeria Police Force from the Contributory Pension Scheme and, establishment of Nigeria Police Special Forces for training of police officers.
The major reason for the agitation for exemption was dissatisfaction on the quantum of benefits payable to such personnel under the CPS, an issue PenCom said can be addressed by an upward review of the rate of pension contribution under the CPS and not by exemption.
At the throes of agitations in the past, the federal government had said it would be unable to sustain pension payment under the Defined Benefits Pension Scheme and further directed that only the Military and Intelligence and security services may withdraw from the CPS. The Military and intelligence services are exempted from CPS by virtue of Section 5 of the Pension Reform Act (PRA) 2014.
Barrister Godwin Ihebudike who represented the Attorney-general of the Federation raised some concerns with the bill, including that it did not make adequate preparation for the board. He observed that the proposed Police Pension Board did not made provision for the funding, composition of board members and staff, a reason he said makes it difficult to take a stand with the bill.
The federal government’s liability under the CPS for the same police personnel is made up of N213.4 billion as accrued pension rights and monthly employer pension contributions of about N2.2 billion. Accrued pension right are retirement benefits of government employees who were in service before July 2004, prior to the enactment of the Pension Reform Act 2004.
“It is evident that the Defined Benefits Scheme is not sustainable as exempting the Military, Department of State Security and the Nigeria Intelligence Agency has resulted in very high allocation of resources to fund their retirement benefits,” commissioner in charge of inspectorate at department at PenCom, Clement Oyedele Akintola said.
“It is also important to note that the exemption of the NPF and any other Agency from the CPS would erode the pool of long-term investible funds accumulated under the CPS,” he stated. He told the audience that PenCom does not see the reason for police to exit the CPS but reasons for enhancement.
The commission argued that exclusion of the NPF from the CPS would also affect existing retirees under the Retiree Life Annuity, which would negatively affect the flow of capital into the insurance industry, thereby undermining the Economic Recovery and Growth Plan (ERGP) of the federal government.
The recurring argument presented in previous attempts to exempt the personnel of the Nigeria Police from the CPS has been hinged on low pension.
The CEO of Pension Fund Operators Association of Nigeria Oguche Agudah said allowing the police to exit the CPS means taking Nigeria to the dark days. He said the concern is about the sustainability of the funding of the police board, transparency of the system as entrenched in the CPS and its risk for the nationa’s financial system.
“The system is not perfect, I must admit. What is needed to be done is to rejuvenate the system and make it work perfectly,” Oguche said.
In justification for the bill, Senator Abbo said he was moved by the disparity between the police and other security agencies in terms of contribution to pension savings and monthly pensions at retirement from active service. “I feel strongly that we are being unjust to the police man on the street. You don’t expect the police man to give his best when you have not given them an encouraging emolument.
“You cannot talk of security of the nation without first taking care of the welfare of the police. We are not taking care of the police and yet expect the security of this country. Mr President please look at the lives of the Nigerian Police men and not just their lives but the lives of their families,” Senator Abbo said.
On his part, Senator Ndume said the proposed mobile police and special forces academy is expected to provide training for Mobile Police. The moribund Mobile Police training camp would be revived to deal with the multifaceted security challenges.
Representative of Inspector-general of Police DIG Sanusi Lemu said the swift passage of the bills will boost the morale of the police officers to confidently deal with the range of criminalities including armed robbery, kidnapping and terrorism face by Nigeria today.
Meanwhile, a non-governmental organization, with the name Contributory Pension and Happy Retirement Advocacy (COPEHRA) has said that the grievances of the police are making them want to exit the Contributory Pension Scheme (CPS) can be resolved within the system.
Legal adviser of the team Barr. Ayinla Mahmod, while making the presentation said all the grievances of the police can be corrected within the CPS.
He said: “Currently, the government is saddled with heavy recurrent statutory expenditures as well as providing funding for necessary and important capital projects. A 3–year review of our country’s budget performance has shown that a large chunk of the budget is dependent on borrowed funds by virtue of rising budget deficits.
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