By Milcah Tanimu
The Pension Fund Operators Association of Nigeria (PenOp) has raised concerns about a bill that seeks to exempt the Nigerian Police Force (NPF) from the contributory pension scheme (CPS). The implementation of this bill could cost Nigeria about N3.5 trillion annually.
The bill passed the second reading in the House of Representatives in 2021. It proposes an amendment to Section 5 (1) of the Pension Reform Act of 2014. The amendment would exempt police officers from the CPS. The CPS currently applies to public and private sector employees. The bill would treat the police similarly to the armed forces and intelligence agencies, who are exempt from the scheme.
PenOp CEO Oguche Agudah spoke at a public hearing on the ‘Police Pension Board Bill 2024’. He explained that the bill could strain the national budget. “If the police leave the CPS, the government will need to invest at least N3.5 trillion annually,” Agudah said. He added that the plan would drain the national budget and hurt Nigeria’s pension assets. These assets currently support infrastructure and bonds, benefiting the economy.
Agudah also clarified that the police’s pension challenges stem from welfare and salary issues. He argued that higher salaries would help solve pension problems. Pension amounts depend on individual salaries.
Sani Mustapha, executive director of the Contributory Pension and Happy Retirement Advocacy (COPEHRA), warned that allowing the police to leave the CPS could set a dangerous precedent. Other public sector groups might seek similar exemptions. This could weaken the integrity of the pension system.
Senator Binos Dauda, the sponsor of the bill, highlighted the pension disparity between police officers and other security agencies. He pointed out that retired commissioners currently receive only N70,000 per month. Dauda added that increasing salaries is crucial to addressing the pension issue. Simply removing the police from the CPS won’t solve the problem.
Sylva Nwaiwu, national chairman of the Nigerian Union of Pensioners’ Contributory Pension Scheme Sector (NUCPS), agreed with Agudah. He attributed the police’s dissatisfaction with the CPS to mismanagement and poor implementation of the scheme.
As the debate continues, stakeholders remain divided. They must find a solution to the pension challenges facing the NPF while ensuring the sustainability of Nigeria’s pension system.
