Pension: Senate bill removes police from CPS
…Establishes Police Pension Board
The Senate has passed a bill removing the Nigeria Police Force (NPF) from the Contributory Pension Scheme (CPS).
The upper chamber has passed another bill authorizing the establishment of the Police Pension Board.
By passing this bill, what the Senate has done is to transfer trillion Naira pension burden on the federal government which it may not be able to fund giving weak revenue position of the country.
The police has been pushing for a distinct Pension Board to manage the Pension of its personnel different from CPS, a move resisted by the government.
The Senate confirmed passage of the bill via its Twitter handle, thus ignoring a 2014 federal government white paper which rejected the agitation.
Under the CPS, both the employee and the employer make contributions towards the employee’s pension — in contrast to the Defined Benefit Scheme (DBS) under which all the burden is borne by the government.
The implementation of the DBS in past had led to unfunded pensions and pile-up of pension liabilities running into trillions of naira before the Olusegun Obasanjo administration carried out an industry reform in 2004.
Under the bill passed by the senate, the federal government will now be fully responsible for police pensions and this is expected to cost trillions of naira over time.
At the public hearing organised by the senate committee on police affairs on January 20, 2023, the National Pension Commission (PenCom), which regulates the industry, the Pension Fund Operators Association of Nigeria and the Nigeria Labour Congress (NLC) opposed the bill.
Boss Mustapha, who was then secretary to the government of the federation (SGF), 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.
The national assembly also passed a bill recently to exempt its staff from the CPS.
