Pension administrators have cautioned that excluding the Nigeria Police Force from the Contributory Pension Scheme might result in an annual expense of N3.5 trillion for the Federal Government.
They shared this perspective during a public hearing on the proposed “Police Pension Board Bill 2024” held at the National Assembly in Abuja on Tuesday.
This projection has raised concerns about the viability of the police pension system if the force is withdrawn from the CPS.
Oguche Agudah, the Chief Executive Officer of the Pension Fund Operators Association of Nigeria, stated that such an action would impose significant and unsustainable financial pressures on the nation’s budget.
“If the police are going to leave this scheme, they will need at least 3.5tn today, invested every year, at least 10 per cent a year for them to be able to pay pensions for about 400,000 police personnel,” Agudah stated.
He highlighted that this approach would place additional pressure on the national budget while jeopardizing Nigeria’s pension assets, which are presently allocated to infrastructure and bonds, playing a vital role in economic development.
Agudah’s stance was supported by other stakeholders, such as officials from the National Pension Commission, who warned that the decision could result in significant financial difficulties and disrupt the stability of the pension system, which currently oversees assets exceeding N21 trillion.
The pension operators emphasized that, although the police’s concerns about pension adequacy are legitimate, withdrawing them from the CPS is not the appropriate solution.
The current structure of the scheme provides for adjustments in contributions and benefits, presenting a more viable and transparent method to tackle these issues.
On the other hand, Deputy Inspector General of Police Bala Ciroma, speaking on behalf of the Inspector General of Police, firmly advocated for excluding the police from the CPS.
“We ask for the removal of the Nigeria Police Fund from the CPS,” he said.
Senator Binos Dauda, the sponsor of the bill and representative of Adamawa South, shared a message from an unidentified retired Commissioner of Police, emphasizing the vast gap between the pensions of retired police officers and those of other security agencies. He pointed out that retired commissioners presently earn a meager N70,000 per month.
“The issue is broader than the pension scheme. If you don’t increase the salary of police officers, even removing them from the CPS will not solve the pension problem,” he read.
A Civil Society Organisation, Contributory Pension and Happy Retirement Advocacy, cautioned in a document presented during the hearing that establishing a distinct police pension fund through the proposed bill might create a risky precedent.
The CSO warned that exempting the police from the CPS could prompt other public sector groups to seek similar exclusions, potentially undermining the essence of the pension reform.
Agudah emphasized the importance of resolving police welfare concerns within the CPS framework, proposing that increased contributions and improved benefits might better support the police while safeguarding the sustainability of Nigeria’s pension scheme.
They contended that implementing the proposed bill as it stands might lead the nation toward a precarious fiscal path.
