The Senate, on Tuesday, passed the Bill for the Establishment of a Police Pension Board, a move that will balloon Federal Government’s pension liabilities.
The Bill excludes the Nigeria Police Force from the Contributory Pension Scheme and return the force to the old Defined Benefit Scheme.
Actuarial evaluations, according the industry stakeholders, indicate that it would cost the Federal Government an additional N2 trillion in pension liabilities for the 300,000 police personnel.
Under the contributory scheme, employees and employers contribute towards pension, but the government takes full responsibility under the defined scheme and this had led to irregular pension payments because of budgetary constraints for the Federal Government.
The upper chamber announced on its Twitter handle on Tuesday that it had passed the Bill, despite opposition from industry stakeholders at the public hearing organised by the Senate Committee on Police Affairs on January 20, 2023.
The National Pension Commission, which regulates the industry, the Pension Fund Operators Association of Nigeria and the Nigeria Labour Congress all opposed the Bill.
Boss Mustapha, former Secretary to the Government of the Federation, had written to the Inspector General of Police in January 2022 to reiterate that an SGF circular, Ref: 59149/S.1/C.1/11/266, dated July 20, 2021, which said the police must be under the CPS, remained in force.
The ex-SGF also referred to the White Paper on the report of the Presidential Committee on Restructuring and Rationalisation 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.
In 2004, the Olusegun Obasanjo administration had carried out a comprehensive pension reform to address the plight of pensioners who were always owed years in arrears.
Nigeria has moved from pension liabilities of N2.4 trillion to accumulated pension assets of N15.45 trillion as at February 2023.
Under the bill passed by the Senate, the Federal Government will now be fully responsible for police pensions.
