From Uche Usim, Abuja
The National Pension Commission (PenCom) has appealed to the Senate to perish the plan of establishing a Police Pension Board (PPB) as an exit strategy from the current Contributory Pension Scheme (CPS), saying the move has a lot of demerits, including the capacity to unsettle the federal government’s fiscal policy and financial system stability.
PenCom made the appeal 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 at the weekend.
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 PPB that will divorce the Nigeria Police Force from the Contributory Pension Scheme and establishment of Nigeria Police Special Forces for the training of police officers.
The push for a PPB stems from a long-standing dissatisfaction with the value of benefits payable to such personnel under the CPS, an issue PenCom said could be addressed by an upward review of the rate of pension contribution under the CPS and not necessarily by the exemption.
In his submission, the Commissioner in charge of the Inspectorate Department at PenCom, Clement Oyedele Akintola said: “It is imperative to note that as of date, about 63.68% of the N14.79 trillion pension assets, as of 30 November 2022, are invested in Federal Government securities. Exempting the NPF would lead to material divestment from FGN securities before maturity, which would have ripple negative effects on not only the finances of the government but also on the entire financial system.
“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 the very high allocation of resources to fund their retirement benefits.
“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”.
Barrister Godwin Ihebudike, who represented the Attorney-general of the Federation picked holes in the Bill, especially as it did not make adequate preparation for the board. He observed that the proposed Police Pension Board did not make provision for the funding, and 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.
The CEO of the 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 nation’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 policeman on the street. You don’t expect the policeman to give his best when you have not given them an encouraging emolument.
“You cannot talk of the 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 policemen 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 faced by Nigeria today.
Meanwhile, an NGO, 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.