Pension operators are raising concerns about the potential impact of excluding the Nigeria Police Force from the Contributory Pension Scheme, warning that it could result in an annual cost of N3.5tn for the Federal Government. This issue was discussed during a public hearing on the “Police Pension Board Bill 2024” at the National Assembly in Abuja. The operators fear that removing the police from the CPS could lead to significant financial strains on the national budget and jeopardize Nigeria’s pension assets currently invested in infrastructure and bonds.
The Chief Executive Officer of the Pension Fund Operators Association of Nigeria emphasized that sustaining pensions for around 400,000 police personnel outside the CPS would require substantial yearly investments to the tune of 3.5tn. Stakeholders, including representatives from the National Pension Commission, echoed these concerns, cautioning against the potential fiscal challenges and destabilization of the pension system, which manages assets exceeding N21tn.
While acknowledging the validity of the police’s concerns regarding pension adequacy, pension operators argue that removing them from the CPS is not the ideal solution. They propose leveraging the existing framework of the scheme to adjust contributions and benefits, offering a more sustainable and transparent approach to addressing the issues raised.
Despite arguments from a Deputy Inspector General of Police advocating for the police’s removal from the CPS, there are reservations from various stakeholders. Concerns have been raised about the disparity in pension benefits between retired police officers and other security agencies, with some suggesting that salary increases for police officers should also be considered alongside pension reforms.
Civil Society Organizations have cautioned against creating a separate police pension fund, highlighting the potential negative precedent it could set. They warn that such a move could lead to demands for similar exemptions from other public sector groups, undermining the integrity of the pension reform efforts.
In conclusion, the focus remains on finding ways to address police welfare concerns within the CPS to ensure the sustainability of Nigeria’s pension system. The proposed bill, if implemented in its current form, could have far-reaching fiscal implications for the country.