The senate has passed the bill for the establishment of a Police Pension Board to exclude the Nigeria Police Force (NPF) from the contributory pension scheme (CPS) and return the force to the old defined benefit scheme (DBS).
The upper chamber announced on its Twitter handle on Tuesday that it had passed the bill, although a 2014 federal government white paper rejected the agitation and previous attempts had been turned down by the federal lawmakers.
Under the CPS, both the employee and the employer make contributions towards the employee’s pension — in contrast with the DBS under which all the burden is borne by the government.
This had led to unfunded pensions and pile-up of pension liabilities running into trillions of naira before the Olusegun Obasanjo administration carried out an industry reform in 2004.
Under the bill passed by the senate, the federal government will now be fully responsible for police pensions and this is expected to cost trillions of naira over time.
At the public hearing organised by the senate committee on police affairs on January 20, 2023, the National Pension Commission (PenCom), which regulates the industry, the Pension Fund Operators Association of Nigeria and the Nigeria Labour Congress (NLC) opposed the bill.
Boss Mustapha, who was then secretary to the government of the federation (SGF), wrote to the inspector general of police reminding him that there was an SGF circular Ref. 59149/S.1/C.1/11/266 and dated July 20, 2021 which said the police must be under the CPS and that the directive had not changed.
Mustapha 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.
The national assembly also passed a bill recently to exempt its staff from the CPS.
Former President Muhammadu Buhari assented to on the even of his departure