Amidst dwindling revenue and fiscal crisis, the federal government may incur additional N2trillion liabilities if President Bola Ahmed Tinubu signs the Police Pension Board Bill into law.
The Senate on Tuesday passed the bill for the establishment of a Police Pension Board, a move that will add extra burden on the federal government’s pension liabilities.
The federal government’s liability under the CPS for police personnel is estimated at over N200 billion as accrued pension rights and monthly employer pension contributions.
Subsequently, the bill excludes the Nigeria Police Force (NPF) from the Contributory Pension Scheme (CPS) and returns the force to the old Defined Benefit Scheme (DBS).
Actuarial evaluations, according to industry stakeholders, indicate that it would cost the federal government an additional N2 trillion in pension liabilities for the 300,000 police personnel.
Daily Trust reports that the National Pension Commission (PenCom), which regulates the pension industry, the Pension Fund Operators Association of Nigeria and the Nigeria Labour Congress (NLC) all opposed the bill.
The former Secretary to the Government of the Federation (SGF), Mr. Boss Mustapha, 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 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.
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 since moved from pension liabilities of N2.4 trillion to accumulated pension assets of N15.45 trillion as at February 2023.