The proposed amendment bill seeking to establish a Police Pension Board and remove the Nigerian Police from the Contributory Pension Scheme has drawn strong opposition from critical stakeholders, including the National Pension Commission, the Central Bank of Nigeria, the Secretary to the Government of the Federation, and the Nigeria Union of Pensioners.
During a public hearing at the Senate, the stakeholders highlighted significant economic and administrative concerns, warning that the move could destabilize the financial system and burden the government with unsustainable pension liabilities.
Speaking on behalf of PENCOM, the Director General, Farouq Khalil warned that exempting the police from the CPS would create a financial liability of N3.5 trillion annually to fund pensions for approximately 400,000 personnel.
He explained that such a move would revert to the Defined Benefits Scheme (DBS), which was abandoned in 2004 due to its unsustainable liabilities exceeding N2 trillion.
“While concerns about pension adequacy for the Nigeria Police are valid, the proposed solution is tantamount to reversing the hands of the clock,” Khalil stated.
“The DBS failed pensioners woefully, and a return would contradict core principles of pension system design: affordability, sustainability, and adequacy,” he added.
CEO of the Pension Operators Association of Nigeria, Oguche Agudah, emphasized the resilience and transparency of the CPS, which benefits retirees and the economy through investment-generated profits.
He warned that reverting to the DBS would divert resources from critical public services, including minimum wage adjustments.
“This shift risks plunging the nation back into an era of accumulated pension arrears and financial instability.
“If the police exit the CPS, it sets a dangerous precedent for other public sector groups, potentially fragmenting the pension system,” he said.
He further noted that the root of the police welfare issue lies in poor salaries, which translate into lower pensions under the CPS.
“If salaries are small, pensions will be small,” he explained.
Despite the concerns, proponents of the bill, including its sponsor Senator Binos Yaro (PDP, Adamawa South), argued that the current pension system is inadequate and demoralizing for police officers.
He highlighted cases of retired Commissioners of Police receiving as little as N70,000 monthly in pension.
“The welfare of the police is at stake, and we need a pension board managed by the police themselves,” Yaro asserted.
Representatives from the police, including Inspector General Bala Ciroma and retired Deputy Inspector General Mohammed Yesufu, supported the bill.
They argued that the police should be granted the same privilege as the Army, DSS, and other intelligence agencies to exit the CPS.
Next week, the Senate Committee on Establishment, led by Senator Cyril Fasuyi (APC, Ekiti North), is anticipated to provide its conclusions and suggestions.
Although PENCOM and the CBN, among other parties, agreed that better police welfare was necessary, they insisted that removing the police from the CPS was not the answer.
To guarantee prompt and sufficient pensions for police officers, they instead advocated for bolstering the CPS and resolving implementation issues.
