On Tuesday 22nd  February, 2022 the House of Representatives Committee on Pension held a Public Hearing on two Bills all seeking to amend the Pension Reform Act 2022. 

The first Bill, “A Bill for an Act to amend the Pension Reform Act 2014 to provide for the exemption of the Nigerian Police Force from the Contributory Pension Scheme and for related matters”,  was sponsored by Hon. Francis Ejiroghene Waive, while the second Bill,  “A Bill for an Act to amend Sections 1 (c), 7(2), 8(1), 18, 24 and 99 of the Pension Reform Act cap P50 LFN 2014 providing that a pensioner shall receive at least 75% of his retirement benefits immediately upon retirement and criminalise the undue delay in the payment of pension”, sponsored by Hon. Jimoh Aremu Olaifa.

The Centre for Pension Rights Advocacy made a submission to the Committee on Monday 21st  February, 2022.

The position of the Centre on the first Bill, which seeks to amend the Pension Reform Act of 2014, to include the Nigeria Police Force as part of the categories of persons exempted from the Contributory Pension Scheme (CPS), was that the duties of the Nigeria Police Force, which include the protection of lives and properties, prevent, detect and investigate crimes; and to prosecute offenders. In order to maintain public safety and public order, the men and women appointed into the Force, put their lives on the line daily with some paying the supreme price, leaving behind members of their families. Therefore the Bill gave all those gathered at the public hearing and Honourable members of the House of Representatives Committee on Pension, the opportunity to discuss the welfare and wellbeing of officers of the Nigeria Police Force as well as members of their families.

The Centre submitted that the Contributory Pension Scheme established under the Pension Reform Act 2014 is the most guaranteed law in the country that protects these officers from old age poverty and destitution as well as financial protection for members of their families in the event of death of their bread winners, for the following reasons:

1. Section 4 of the Act, makes provision for the creation of a ready pool of fund, that will be used in the payment of pension for life to an officer. Payment of pension to retiring officers is no longer left at the mercy of annual budgets, which has to do with availability of fund as was the case with the old  Defined Benefits Scheme. 

2. Section 4(4) provides that notwithstanding any of the provisions of the Act, an employer may agree to (a) on the payment of additional benefits to the employee upon retirement or (b) elect to bear the full responsibility of the Scheme provided that in such a case, the employer’s contribution shall not be less than 20 percent of the monthly emolument of the employee.  CPRA is of the view that this is where the National Assembly as well as all critical stakeholders should be focusing on. The Centre is convinced that the men and women of the Nigeria Police Force, in view of the very risky nature of their duties, the government and indeed the society at large should protect them from old age poverty and destitution. 

3. Section 4(5) provides that “In addition to the rates specified in sub-section (1) of the section, every employer shall maintain a Group Life Insurance Policy in favour of each employee for a minimum of three times the annual total emolument of the employee and premium shall be paid not later than the date of commencement of the cover. While subsection 6 provides that “Where the employer failed, refuse or omitted to make payment as and when due, the employer shall make arrangement to effect the payment of claims arising from the death of any staff in its employment during such period”. According to the CPRA,  the provisions quoted above are duties imposed on an employer by law and not gratuitous. Therefore they are legally enforceable.

4.            Furthermore, Section 11 of the Act makes the Retirement Savings Account (RSA), where an officer’s pension contributions are credited, managed and invested, a personal account of the owner. The Nigeria Police Force has no access to the funds in the RSA. Therefore even in the unfortunate situation where an owner is dismissed, the owner cannot be deprived of the already earned pension benefits in the RSA.

5.            Section 17 established the National Pension Commission (PenCom), whose objects among others as stated in Section 18(C) include regulating, supervising and ensuring the effective administration of pension matters and retirement benefits in Nigeria.  Therefore pension matters are not left at the pleasure of the employer. 

6.            In 2011 the Police sort approval for exemption from the Contributory Pension Scheme (CPS). A Committee of stakeholders was set up by the President to look into the demand and make appropriate recommendations. The end result was the licensing of a special Pension Fund Administrator (PFA) in 2014,  The NPF Pension Ltd.  CPRA stated that to the best of their knowledge, the PFA is being managed professionally, free from all Public Service bureaucracy and the command structure of the Nigerian Police Force. 

The positive impact of the CPS is not only felt by members of the Scheme. Nigeria’s Net Assets Value of pension assets under the CPS as at 31st  December, 2021 was N13.42 trillion. This is against a background of Federal Government budgetary pension deficit, estimated at N2 trillion as at June, 2004 when the CPS commenced. Pension fund under the CPS is providing the country with long term investable fund. The fund is also impacting positively on other sectors of the financial sector of the economy. As the fund press for improvements in the architecture of allocative mechanism, including investment, risk management, better accounting, auditing, and brokerage; information disclosure; insurance supervision and management for the group life insurance policy and annuity; new security rating agencies have developed. The fund has also contributed in the development of equity market, all contributing in the overall economic development of the country. Combined, PenCom and Pension Operators employ professionals in diverse fields as well as hundreds of young graduates, thereby contributing in job creation. 

Consequent upon the above, CPRA made the following submission: 

1. In line with the provision in Section 4(4)(a) the Federal Government should be paying retirees of the Nigeria Police Force 300% 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 will boost their monthly take home pension. 

OR

2. n line with the provision in Section 4(4)(b) the Federal Government as their employer, should take the sole responsibility of contributing for their pension. 

3. 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. 

4. The above should be within the provisions of the Contributory Pension Scheme under the Pension Reform Act 2014. 

Concluding submission on the Bill, 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 our 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.

(Our position on the second Bill will be published next month)

Takor, mni Esq, is the Executive Director, Centre for Pension Right Advocacy (CPRA)

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