NPF exiting contributory pension will cost 3.5 trillion annually
By Patience Ikpeme
Pension Fund Operators of Nigeria (PenOp) have indicated that the federal government needs to allocate at least N3.5 trillion annually to remove the Nigerian Police Force (NPF) from the Contributory Pension Scheme (CPS).
This funding is deemed essential for ensuring the NPF’s financial independence and sustainability.
During a public hearing in the Senate on Tuesday regarding the Bill to remove the Police from the Contributory Pension Scheme, Oguche Agudah, Chief Executive Officer of PenOp, described the transition as “unsustainable” given the current fiscal deficit
The bill sponsored by Senator Binos Dauda Yaroe, representing Adamawa South, is titled “Bill for an Act to Establish Police Pension Board, Bill, 2024 SB.294.” This legislation seeks to create a separate pension board for the Nigerian Police Force, allowing them to exit the Contributory Pension Scheme (CPS) and transition to a Defined Benefits Scheme (DBS). The bill aims to address concerns regarding inadequate pensions for retired police officers.
“About N3.5 trillion of annual budget will be required every year to exit the Police from Contributory pension scheme which is not sustainable because if you budget N3.5 trillion for just 400,000 people out of the millions of workers, what will happen to others?
“In the 2025 budget of N47.9 trillion, the N3.5 trillion is not event there. Therefore from the presentations we have seen today at the Public hearing, it is obvious that the Contributory Pension Scheme is not the problem of the Nigerian Police but the welfare
“Therefore what we keep advocating as Operators is that there should be an increase in wages because if your salary is small, your pension too will be small and exiting will not solve the problem and our key aim is to ensure that all pensions are paid in time,” he further stated.
In the same vein, the acting Director General of the National Pension Commission, Omolola Oloworaran noted that the Commission as a regulator is working to ensure that pension administration is sustainable and adequate
Represented by Dr. Farouk Aminu, the Commissioner Administration at PenCom, she added that “the Federal government has set up a committee consisting of the minsiter of finance, Accountant General and Auditor General of the Federation, head of service among other heads of agencies to identify the issues of pension liabilities and accrued rights,”
Earlier in his submission, the Inspector General of Police represented by DIG Bala Ciroma said the Force is supporting the exit of the Police from CPS to ensure effective administration of pensions for serving and retired officers.
