Status of Exemption of Police from Contributory Pension Scheme
The 9th Assembly before the end of their tenure on the 11 June 2023, read for the third time and passed the Nigerian Police Pension Board (Establishment) Bill, 2023 (SB.1009).
The Bill seeks for the establishment of a Police Pension Board and to exclude the Nigeria Police Force (NPF) from the Contributory Pension Scheme (CPS) and return them to the Old Defined Benefit Scheme (DBS).
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Senator Halliru Jika moved that the Senate should receive and consider report of the Committee on Police Affairs on the Nigerian Police Pension Board (Establishment) Bill 2023 (SB.1009) and it was seconded by Senator Frank Ibezim.
At the passing of the Bill, Senator Sabi Abdullahi said “I want to commend the Chairman of this Committee for ensuring that this particular Bill will receive our attention before we wind down. This is very important because the issue of pension for Police Force is very critical. I think this is a very important intervention by this Ninth Senate and I’m happy to be part of this”.
Issues Raised on the Exemption of Police from CPS
Huge pension liability which will likely not be paid by FG
Several issues have been raised on the exemption of police from CPS, top on the list is that the exemption will create a huge pension liability for the federal government because under the Defined Benefit Scheme (DBS) which the police will be moved to, all the burden of the pension liability will be borne by FG. Before the introduction of CPS in 2004, when the police was under the DBS, their outstanding pension labilities which was unpaid by FG was running into trillions of naira, if the police is moved back to DBS and FG is again fully responsible for police pensions, there is no guarantee that FG will be able to pay police pension which is expected to cost trillions of naira over time, leading to more outstanding pension liability for the police.
Industry Stakeholders oppose the Exemption of Police from CPS
The regulator for the pension industry, the National Pension Commission (PenCom), Pension Fund Operators Association of Nigeria and the Nigeria Labour Congress (NLC), all opposed the bill at the public hearing organised by the Senate Committee on Police Affairs on January 20, 2023, arguing that all the agitations of the police can be resolved under the CPS if their employer (FG) increases its pension contribution and also provide additional benefits to police at retirement, and all these are already provided for under the Pension Reform Act 2014.
Analysts have also said that the exemption of the police would unsettle the FG fiscal policy and financial system stability in Nigeria, with over 60% of the N15 trillion pension assets invested in Federal Government securities, exempting the police could lead to material divestment from FGN securities before maturity. This would have ripple negative effects on not only the finances of government, but also on the entire financial system in Nigeria.
FG Circular and White Paper oppose Police Exemption from CPS
The then secretary to the government of the federation, Boss Mustapha, also wrote to the inspector general of police reminding him that there was an SGF circular Ref. 59149/S.1/C.1/11/266 and dated July 20, 2021 which said the police must be under the CPS and that the directive had not changed. Mustapha also referred to the White Paper on the report of the Presidential Committee on Restructuring and Rationalization of Federal Government Parastatals, Commissions and Agencies, which expressly forbids any government body, apart from the military and the intelligence services, from exiting the CPS.
Support for Police Exemption from CPS
IGP commends National Assembly for Police Exemption from CPS
The Inspector-General of Police, as at the time National Assembly passed the bill for exemption of police from CPS, IGP Usman Alkali Baba, commended the National Assembly for its historic passage of the Police Pension Board Bill
The IGP described the passage of the critical Bill as a milestone achievement with positive impact that will redefine the act of policing the country, enhance police productivity and address the reoccurring pension related hardship. He stressed that the removal of the Nigeria Police Force from the Contributory Pension Scheme and establishment of NPF Pension Board is a welcome development and will be resourceful in addressing the plight of Police retirees.
While acknowledging the doggedness and resilience of the National Assembly in the passage of the critical bill, the Inspector-General of Police commended the efforts of well-meaning Nigerians for their support and concern towards the passage of the bills which he said in no time will definitely attract the assent of the President for its full implementation. The Police Boss equally commended the steadfastness and patience of the retirees on the age-long battle of the pension palaver and assured that all hands are on deck to make the bills a reality.
Police Retirees appeal to President Tinubu to sign exemption of Police from CPS
Retirees of the Nigeria Police Force under the contributory pension scheme have appealed to President Bola Ahmed Tinubu to sign into law the Nigeria Police Pension Board bill, saying it will liberate them from enslavement
The retirees made the appeal in a press release jointly signed by Barrofem Mbang (DSP Rtd) National Legal Adviser, Nigeria Police Retirees under Contributory Pension Scheme and SP Iwara Ibiang (Rtd), Vice Chairman, Cross River Chapter; Mr. Christopher Effiong, the National Coordinator of the Police Retirees and MrBright Kakada, the Deputy Chairman, Delta state chapter,.
The police retires said, on behalf of the National Executive, the stakeholders and over 44,300 dogged members of the Police Retirees under the Contributory Pension Scheme across the nation, we express our deepest appreciation to the 9th Assembly under the leadership of Senator Ahmed Ibrahim Lawan and especially Senator Ishaku Abbo, Senator Haliru Dauda Jika and Rev. Francis Waive for their highest sense of solidarity, financial and moral support leading to the successful passage of the bill.
“With the deepest sense of humanity we call on His Excellency the President of the Federal Republic of Nigeria Sen. Bola Ahmed Tinubu GCFR to graciously assent to the bill and give members of the Nigeria Police Force and the Retirees a new lease of life.”
Conclusion
When will the Police be exempted from CPS
The police will be exempted from CPS when the Bill is signed into law by President Bola Ahmed Tinubu.
How much will the police move out of CPS
It is estimated that the police will move around N1 Trillion or about 7% of total assets under management, out of the CPS.
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