Exemption Of NPF From CPS Would Affect Pension Systems, Processes – PenCom
PenCom DG, Aisha Dahiru-Umar
The Director-General, National Pension Commission (PenCom) Aisha Dahiru-Umar, has expressed concern on the agitation by the officers of the Nigerian Police Force (NPF) that they should be exempted from the Contributory Pension Scheme (CPS), noting that their exemption would result in the dismantling of the institutions, systems and processes that Government had put in place in the last few years towards the implementation of the pension reform programme.
The PenCom DG made her position known in her presentation at the public hearing organised by the House of Representatives Committee on Pension on two bills for the amendment of the Pension Reform Act 2014, recently in Abuja.
According to her, “Exemption of the personnel of the NPF would imply additional financial burden on the Federal Government by way of unsustainable pension obligations. For instance, as at September 2021, there were 304,963 Police personnel based on IPPIS data. An actuarial valuation revealed that the retirement benefits (pension and gratuity) liability of these personnel under the defunct Defined Benefits Scheme would amount to about N1.84 trillion,” she said.
On the other hand, she said the liability under the CPS for the same NPF personnel is made up of N213.4 billion as accrued pension rights and monthly employer pension contributions of about N2.2 billion.
The Director General said to address the concerns of Police Personnel on pension, the employer can review upwards its current contribution rate of 10 per cent.
In addition, she said, the PRA 2014 further provides that notwithstanding the pension contributions made by employer and employee into the employee’s RSA, the employer may agree on the payment of additional benefits to the employee upon retirement.
“Accordingly, the Federal Government may wish to provide additional benefits in the form of gratuity to personnel of the NPF upon their retirement,” she said.
Executive Director, Centre for Pension Right Advocacy (CPRA), Ivor Takor, In a memorandum presented to the committee recommended that Federal Government should be paying retirees of Nigeria Police Force 300 per cent of their last annual gross pay as gratuity on retirement and that Police Officers from the Rank of Assistant Inspector-General of Police and above should retire with their full salaries as pension, as is the case with Federal Permanent Secretaries and Universities Professors.
He submitted that in line with the provision in Section 4(4)(a) the Federal Government should be paying retirees of the Nigeria Police Force 300 per cent of their last annual gross pay as gratuity on retirement, while the contributions in their Retirement Savings Account (RSA) should be utilize for the payment of their pension. This, he said would boost their monthly take home pension.
According to him, in line with the provision in Section 4(4)(b) the Federal Government as employer of the Police Personnel, should take the sole responsibility of contributing for their pension.
Takor maintained that Police Officers from the Rank of Assistant Inspector-General of Police and above should be allowed to retire with their full salaries as pension, as is the case with Federal Permanent Secretaries and Universities Professors, adding that the above should be within the provisions of the Contributory Pension Scheme under the Pension Reform Act 2014.
CPRA appealed to Honourable Members of the House of Representatives Committee on Pension and other Honourable Members of House of Representatives, to be at the forefront of ensuring that gallant men and women of the Nigerian Police Force, are given adequate retirement benefits within the provisions of the Contributory Pension Scheme, while teaming up with the Federal Government to put a stop to agitations by some segments of the Federal Public Service to exit the CPS, whenever the President issues a Proclamation for the inauguration of the National Assembly.
Source: Inspenonline
