TheNewsGuru

Tag: Pension

  • Why police should not exit CPS – Pension fund operators

    Why police should not exit CPS – Pension fund operators

    The Pension Fund Operators Association of Nigeria (PenOp), has expressed concerns over proposals from the Nigeria Police Force (NPF), to exit the Contributory Pension Scheme (CPS) to Defined Benefits Scheme (DBS).

    Mr Oguche Agudah, the Chief Executive Officer of PenOp, voiced the concern on Tuesday in Abuja during a public hearing on a bill for an act to establish a police pension board. He said that the CPS operates on a pre-funded model with both employees and employers contributing a mandatory percentage of the employee’s salary.

    Agudah said that usually, a minimum of eight per cent from the employee and 10 per cent from the employer, totaling a minimum contribution rate of 18 per cent, is usually gathered. He said that either party had the latitude to contribute a higher percentage, which allows pension funds to accumulate and be invested for future payouts.

    Agudah said that the National Pension Commission (PenCom), as of September, had a total pension assets, under the CPS, that had exceeded ₦20 trillion (approximately $12 billion), He said that PenCom had ensured that the funds were not solely reliant on government budgets, thus reducing vulnerability to fiscal constraints.

    Agudah said that the transitioning to the DBS would not solve the police’s concerns.

    “It will, rather, create deeper financial and operational challenges for the country,” he said.

    He said that the CPS had proven to be a transparent, sustainable and resilient system for managing pensions, benefiting both retirees and the broader economy. Agudah said that reverting to the DBS model, which relies on government budgetary allocations, would lead to fiscal unsustainability and delayed payments for pensioners.

    “Moving the police out of the CPS will require a staggering N3.5 trillion annually to fund pensions for approximately 400,000 personnel, in a budget already burdened by deficits. This is simply unsustainable.

    “It will also divert resources from other critical needs, including minimum wage adjustments and public services,” he said.

    Agudah said that pension funds under the CPS are currently invested in bonds, infrastructure and other critical sectors that contribute to the country economic growth.

    He said that unwinding the investments to accommodate a DBS for the police would erode the value of assets and destabilise the financial system.

    Agudah said that the CPS currently holds over N21 trillion in assets, and remains a critical component of the country’s economic infrastructure.

    He said that maintaining the police within the CPS would ensure long-term sustainability, equity and economic stability. Agudah said that setting a dangerous precedent was not good.

    “If the police exit the CPS, other public sector groups may demand similar transitions, fragmenting the pension system and undermining reform efforts.

    “And our key aim and our key goal is to ensure that all pensioners are paid on time, all pensioners have a living pension, and everybody gets their pension on time.

    “What we heard at the hearing is actually a joy to us because what we are seeing is that even the sponsor of the bill is on the path that it is not really the CPS that is the problem of the police. It is the welfare. So, what we have said is, if your salary is small, your pensions will be small,” he said.

    PenCom urges police to remain with CPS

    Meanwhile, Ms Omolola Oloworaran, Acting Director-General of National Pension Commission (PenCom), has urged the Nigeria Police Force (NPF), to remain with the Contributory Pension Scheme (CPS).

    Oloworaran said this during a public hearing on a bill for an Act to establish Police Pension Board, in Abuja on Tuesday.

    Oloworaran, represented by the Commissioner of Administration, Dr Farouk Aminu, also reiterated PenCom’s commitment to Police welfare. She said that pension must be affordable, sustainable and adequate.

    “PenCom has consistently proposed practical solutions, including increasing pension contribution rates, offering additional retirement benefits, and implementing periodic pension reviews under the existing CPS framework.

    “These measures are designed to enhance the financial well-being of retired police personnel without compromising fiscal discipline or administrative efficiency. Notably, the establishment of an Augmentation Fund and the enhancement of the Retiree Resettlement Scheme demonstrate PenCom’s commitment to addressing the unique needs of the police.

    “The welfare of Nigeria Police personnel is paramount, the proposed bill is a step in the wrong direction. The CPS offers a balanced approach to achieving pension adequacy, affordability, and sustainability,” Oloworaran said.

    She said that implementing PenCom’s recommendations was a more viable path to meeting the needs of police personnel while safeguarding the broader national interest. Oloworaran said that the senate should prioritise those solutions and uphold the principles of Nigeria’s pension reform.

    The Chairman, Senate Committee on Establishment and Public Service, Sen. Cyril Fasuyi, said that the bill was to establish a board to oversee Police pension. Fasuyi said that the committee intended to create an enabling environment for retired police officers.

    Fasuyi said that the public hearing provides more information and an opportunity to various stakeholders.

    Sen. Sen. Binos Yaroe, who sponsored the bill, said that retired Commissioners of Police take N70,000 while Assistant Superintendents of Police collect about N40, 000 to N50, 000 as pension. He said that Military, Department of State Service (DSS), Defence Intelligence Agency (DIA) and National Intelligence Agency (NIA) had pulled out of CPS.

    He, however, said that the NPF, which is the lead security agency in section 214 of the cconstitution, is left under CPS regulated by PenCom. This, according to him, places retired police officers on wrong post-service employment in spite of their crucial role. He said that the matter was not just about the police exiting, but improving their salaries.

    “Even if they exit, with a poor salary, their pension will still be poor. Towards the end of the ninth assembly, the bill was passed but not signed because we started the process late. That’s why we started the process again early March 19 and July 4.”

    The Inspector-General of Police, Kayode Egbetokun, said that the NPF wanted the police pension board established for improved welfare for retired police officers. Egbetokun was represented by the Deputy Inspector General (DIG) of police, Bala Chiroma.

    The National Chairman of Nigeria Union of Pensioners Contributory Pension Scheme Sector (NUPCPS), Mr Sylva Nwaiwu, said that CPS should be amended. Nwaiwu said that CPS was good for the nation, adding that pension increments should always be encouraged.

    Alhaji Sani Mustapha, the Executive Director of the Contributory Pension and Happy Retirement Advocacy (COPEHRA), said that CPS had proven to be resilient, transparent and sustainable,

    He added that it was also effectively addressing the shortcomings of the previous pension system. He said that keeping the NPF within the CPS aligns with best practices in pension management, ensuring their financial security while also supporting Nigeria’s broader economic development.

    Mustapha said that the transition to a Defined Benefit Scheme (DBS) would introduce significant risks, including fiscal unsustainability, delayed payments and potential economic setbacks. He said that it was imperative to uphold the principles of equity, transparency and sustainability by maintaining the NPF’s inclusion in the CPS.

    “My recommendation is to maintain the current system to safeguard the future of our police personnel and promote a robust economic environment in Nigeria. Any challenge that the Police may have in the administration of their pensions under the CPS should be discussed and resolved by PenCom and other relevant Government agencies,” Mustapha said.

    The director said that there were many benefits in retaining police in the CPS. He listed the benefits to include regulation and oversight, security and timeliness, economic independence, transparency and accountability, and alignment with global trends.

    “The risks of establishing a separate pension board for DBS includes fiscal burden, lack of autonomy, economic instability and precedent setting,” Mustapha said.

  • FG to begin payment of pension backlog – Edun

    FG to begin payment of pension backlog – Edun

    The Minister of Finance and Coordinating Minister of the Economy, Mr Wale Edun, says the Federal Government will soon begin payment of pension backlog.

    Edun said this during a peaceful rally by the Nigeria Union of Pensioners Contributory Pension Scheme Sector (NUPCPS) at the Federal Ministry of Finance in Abuja on Tuesday.

    “We will start next week to pay everything that we can under the current budget as approved by the National Assembly. What has happened now is that there is backlog in terms of contributions and there is a solution.

    “There has been a committee under the Office of the Head Of Service which has met the minister of budget, and I. We have a plan for dealing with the backlog under the Contributory Pension Scheme (CPS).

    “We are committed to paying it. It has to be paid this year. We are committed to doing that starting from next week,” Edun said.

    “We have to have a solution that takes care of everybody, and that is being worked on. Its going to be a question of going to the capital market and raising an instrument that allows that backlog to be cleared once and for all.

    “We are going to present to the president, a viable solution using the financial market taking care of the huge backlog under the CPS,” Edun said

    He reiterated Federal Government’s commitment to pensioners welfare.

    “I am not happy that you have had to take this step and I assure you that any time that you or your leaders seek audience with me, I will be available in the office.

    “I was not aware of the Nov. 11 deadline, otherwise I will never have allowed a situation like this. In spite of your age, your situation in terms of cost of living, it costs money to come here. I would have avoided that as much as I could,” Edun said.

    Speaking earlier during the protest, the National Chairman of NUPCPS, Mr Sylva Nwaiwu, said CPS had never benefited from any increment of the National Minimum Wage Act.

    Nwaiwu said that the Federal Government had not released accrued rights for pensioners for over 20 months (since March 2023 till date).

    “Our senior citizens are suffering, after using our youthful years to serve our father land and we get this in return. Please use your good office to help us. Some of our members are bedridden and some have died in the struggle. We cannot feed ourselves, take care of our family or take care of our medical bills anymore,” he said.

    The chairman said that they had dropped several letters for the minister but none was acknowledged which made the union members to stage this peaceful rally. Nwaiwu, however, commended the president for raising minimum wage.

    Mrs Christiana Ubah, a pensioner, said that she retired in 2015 from the budget office of the federation, and could no longer feed herself. ” See how my face is, it is hunger.”

    She complained that for six months, her pension had not been paid by African Alliance, saying that the government needs to come to our aid.

    “Among us here are people that retired since march last year and have not been paid a kobo. look at how harsh the economy is because of our leaders.

    “We do not have anything to live on now, every year they will tell us in the media that pension fund asset has increased, so why are pensioners not paid.

    “We have a constitution in the country that every five years salaries will increase and pension will increase too. We want this reflected,” Ubah said.

  • Lagos Gov’t pays N740m accrued pensions

    Lagos Gov’t pays N740m accrued pensions

    The Lagos State Government has paid N740 million accrued pension rights to another set of 348 retirees.

    Mr Babalola Obilana, Director General, Lagos State Pension Commission(LASPEC), confirmed this at the 107th batch retirement bond certificate presentation ceremony on Friday in Lagos.

    Obilana said the payment was for the retirees’ past service benefits before the start of the Contributory Pension Scheme (CPS) in 2007.

    According to him, the state government is committed to supporting retirees throughout their retirement journey.

    Obilana commended Gov. Babajide Sanwo-Olu for his prompt support payment of pension obligations.

    He also lauded the governor for the various policies initiated to better the lives of the retirees.

    The director general explained that Lagos State has made significant strides in enhancing transparency, efficiency, and sustainability of its pension systems.

    He stated that implementation of the CPS provided a more equitable distribution of benefits, ensuring that all workers had access to a reliable pension at retirement.

    According to him, LASPEC is committed to maintaining an efficient and robust pension process.

    He said: “My team is consistently focused on improving our processes, ensuring timely payments, and enhancing the overall experience for retirees.

    “Our dear state has transited to paying retirement benefits in the same year our officers retire.

    “This is an accomplishment that reflects our dedication to fulfilling Gov. Sanwo-Olu’s goal of financial security for Lagos State retirees.”

    LASPEC has also launched sensitisation programmes to educate current employees and those close to retirement about the CPS and the necessary documents for processing retirement benefits.

    These events featured experts, who are specialists in financial literacy and investment options.

    Obilana said this was to ensure that the state’s retirees were well-equipped to manage their finances effectively in their new phase of life.

    He added that the state government had also implemented free health insurance and subsidised public transportation for Lagos State retirees, demonstrating its commitment to their welfare.

    “I extend my heartfelt congratulations to each retiree receiving their retirement bond certificate today.

    ” This is a moment to celebrate your achievements, contributions, and the legacy you left behind.

    “We celebrate the culmination of years of dedicated service by our retirees, who have tirelessly contributed to the growth and development of the state.

    “Your hard work, commitment, and sacrifices have laid the foundation for the progress we enjoy today.

    “Let me remind you that retirement is not an end but a new beginning.

    “Embrace this time with enthusiasm, pursue your dreams, and continue to contribute to your communities in meaningful ways,” he said.

    Also speaking at the event, Mrs Funmilayo Aiyelabola, a retiree, appreciated the state government for having the interest of the retirees at heart.

    She also commended the LASPEC team and the Pension Fund Administrators(PFAs) for their support and for being highly professional in processing the retirement benefits.

  • Police retirees vow to protest over Pension Exit Bill

    Police retirees vow to protest over Pension Exit Bill

    The National Union of Police Retirees, Kaduna State Branch has vowed that it would organise the mother of all protests by occupying the National Assembly until President Bola Tinubu signs the Pension Exit Bill.

    According to the retirees, they are earnestly waiting for “the bill to exit the Nigeria Police from Contributory Pension Scheme and the bill for the establishment of the Nigeria Police Pension Board, as the police retirees are patiently waiting for, and there is the tendency that the promise may not be fulfilled as September is winding up.”

    This was contained in a statement signed by the Chairman of the Police Retirees Kaduna State Chapter, CSP Mannir Lawal Zaria (Rtd) and the Vice Chairman,ASP Danlami Maigamo (Rtd),issued to journalists in Kaduna on Thursday.

    They lamented that the police retirees under the Contributory Pension Scheme were dying due to poverty and hunger.

    “The union is also pleading that, as the death toll is on the increase among the police retirees under the Contributory Pension Scheme and the price of commodity of any type is also on the increase.”

    “The Federal Government should come to the aid of the police retirees under the contributory Pension Scheme before they all perish, by immediately paying the following allowances to the police retirees under the contributory Pension Scheme.

    ”The 2.5 percent differential, the Federal Government Palliative and three consecutive pension increase by the Federal Government as well as the minimum wage increase.

    “During the Police Retirees Kaduna State Branch monthly meeting held last Wednesday at Police Officers Mess Kaduna, members became shocked and worried, as there is a sign of unfulfillment of a promise that begin to manifest it self because it can be recalled that, on the 22/09/24, the National Union of the Police Retirees under the contributory Pension Scheme carried out a nationwide peaceful protest to the National Assembly Abuja.

    “During the protest, the Chairman Senate Committee for Police Affairs, Senator Ahmed Abdulkadir Malamadori, addressed some of the retirees in his office, where he promised the retirees that, before September 24, they would be exited from the Contributory Pension Scheme to the Define Benefit Scheme (DBS). that the two Police Bills would be Harmonized.

    “Sequel to this sign of un fulfilment, the blood pressure of many concerned police retirees has risen above maximum.”

  • FG set to clear all outstanding pension liabilities

    FG set to clear all outstanding pension liabilities

    The National Pension Commission (PenCom) on Tuesday in Lagos State assured that all outstanding pension liabilities would be paid soon.

    Ms Omolola Oloworaran, Acting Director-General, PenCom, gave the assurance at a workshop on the Online Enrolment Application for Pension Desk Officers (PDOs) of Treasury-funded Ministries, Departments and Agencies (MDA) of the Federal Government.

    Oloworaran noted that concerted efforts by critical stakeholders had reached advanced stage, to clear all the Federal Government’s outstanding pension liabilities under the Contributory Pension Scheme (CPS).

    She said that the efforts put in place would also provide lasting solutions that would address the problems of inadequate funding and delay in fund releases for the payment of accrued rights.

    The acting director-general reiterated the commitment of PenCom to continuous service improvement in the pension industry, so that contributors and retirees received the best possible experience regarding pension matters.

    “Although the current delay in release of funds by the Federal Government for the payment of retirees’ accrued rights negates the cardinal objective of the CPS of payment of retirement benefits as and when due. I would like to assure you that this situation will soon be resolved,” she said.

    Oloworaran also assured that the commission would continue to collaborate and work closely with the PDOs towards a successful 2024 Online Enrolment Exercise, scheduled to commence on Oct. 7 and subsequent periods.

    She stated that the workshop kick-started the final preparations towards commencement of the 2024 online enrolment exercise for 2025 prospective retirees of Treasury-funded MDAs.

    “Recall that, in line with its statutory mandate, PenCom conducts annual pre-retirement verification and enrolment exercise for employees of Federal Government Treasury-funded MDAs. That is employees who are scheduled to retire within the next fiscal year.

    “The objective of the exercise is to obtain accurate information of prospective retirees that will enable PenCom determine their Accrued Pension Rights for budgetary provision by the Federal Government,” she said.

    According to her, since year 2021, the commission has automated the retirees’ enrolment process with the deployment of the Online Enrolment Application.

    Oloworaran noted that the online enrolment application had the capabilities to register, verify, and enrol prospective retirees of Treasury-funded MDAs.

    She explained that the Application had four modules namely: Retiree Module, MDA Module, PFA Module and PenCom Module.

    “As indicated, the Application was designed with the MDA Module that enables the PDOs to upload information of retirees/prospective retirees.

    “Therefore, in recognition of the significant role of the PDOs in the retirees’ enrolment process, the commission deems it necessary to organise annual workshops for the PDOs.

    “Indeed, workshops like this are integral to the commission’s mandate and commitment to enhancing the knowledge and building the capacity of stakeholders in the pension industry,” she said.

    According to the acting director-general, the objective of the workshop is to train the PDOs with the requisite knowledge on the relevant modules of the enrolment application.

    Oloworaran noted that, specifically, the workshop would focus on addressing the gaps observed in the previous exercises and enlighten PDOs on the modalities for the upcoming enrolment exercise for 2025 prospective retirees.

    She added that PenCom held the physical workshop to provide PDOs with the necessary hands-on training that would enable them tackle the operational and technical challenges encountered during the enrolment process.

    The PenCom boss said: “I, therefore, urge you all to actively participate and ask questions as well as seek further clarifications, where necessary, so as to ensure proper understanding.

    “Let me also state that the commission is not oblivious of the challenges being experienced occasionally with the Enrolment Application due to downtimes.

    “It is important to note that these downtimes mostly occur during the last minute rush by retirees and relevant stakeholders to meet the enrolment deadline.

    “The commission is committed to providing support to PDOs during those few periods of downtimes.

    “I am particularly pleased to inform you that the commission has already engaged a Consultant to design and develop a new Enrolment Application.

    “An application that will not only address these issues, but also provide users with a more friendly and seamless experience during the enrolment process.”

  • Tinubu raises Armed Forces pension by 20%

    Tinubu raises Armed Forces pension by 20%

    The Chief of Naval Staff (CNS), Vice Adm. Emmanuel Ogalla, on Thursday, said that President Bola Tinubu had approved the implementation of 20 per cent increase in pension for the Armed Forces personnel.

    Ogalla said this at the 2024 Accounts and Budget Seminar with the theme: “Optimising Nigerian Navy Non Public Fund Opportunities In A Dynamic Economic Environment The Nigerian Navy Personnel In Focus.”

    Ogalla was represented by the Chief of Policy and Plans, Naval Headquarters, Rear Adm. Joseph Akpan, at the two-day event, scheduled to hold from July 25 to July 26 at the Naval Dockyard, Victoria Island, Lagos.

    The CNS commended Tinubu  for prioritising the welfare of the Armed Forces personnel both serving and retired.

    He said the increment took effect from January.

    “This and other packages, including those initiated by various services, are to boost moral for efficiency.

    “This seminar is coming at a time strategies are being explored to generate funds independently from budgetary allocation in addressing welfare needs toward enhancing living standards of personnel.

    “This initiative is fundamental for operational efficiency constraint that human factor is the most important for the success of any organisation including the Nigerian Navy,” he said.

    “Optimising non public funds for improved personnel fare boost wellbeing and facilitates retaining skilled personnel for enhanced operational effectiveness,” he added.

    He noted that the Nigerian Navy operated some schemes to enhance the welfare of its personnel.

    Ogalla listed the schemes as the navy insurance, car refurbishing loan and welfare loan schemes.

    “These schemes are managed by the Directorate of non public funds.

    “These are critical factors necessary toward protecting the maritime environment for economic prosperity of our nation which the Nigerian Navy is saddled with,” he said.

    Ogalla stressed the need for transparency, accountability and continuous evaluation in the management of these schemes to meet the needs of the personnel.

    “I am delighted that lectures for this seminar have been crafted to elucidate these factors as well as evolve innovations to utilise non public funds to improve personnel welfare.

    “It will not be out of place if packages like mortgage among others can be discussed for a more resilient and capable naval force.

    “I, therefore, encourage us to utilise these two days to brainstorm on critical policy issues on non-public fund opportunities toward improved operational efficiency for personnel welfare,” he said.

    The CNS appreciated President Tinubu for his guidance and unwavering support to the service as well as for enhancing welfare packages of the Armed Forces.

    “We remain grateful and will continue to carry out our statutory mandate for economic prosperity and poverty eradication in line with your renewed hope Nigeria,” Ogalla said.

  • Police and contributory pension scheme – By Ikechukwu Amaechi

    Police and contributory pension scheme – By Ikechukwu Amaechi

    The Senate, on July 4, 2024, passed for a second reading a bill that seeks to remove police retirees from the Contributory Pension Scheme (CPS). Promoters of the bill, which seeks, among other things, to replace the Nigeria Police Force Pensions Limited (NPF Pensions), the pension fund administrator (PFA) charged with the exclusive administration of police pensions, with the Nigeria Police Pensions Board, aver that it will correct the inequality in the pension benefits paid to police retirees vis-à-vis their counterparts in other security agencies.

    Let me state from the onset that it will not. Instead, the exit will make the lot of an average police retiree more precarious. Exiting police from the CPS is an ill-advised gambit, the same way the idea of replacing the high performing NPF Pensions Limited with a nebulous Nigeria Police Pensions Board is harebrained. I will explain shortly.

    Leading the debate, the sponsor of the bill, Senator Binos Yaroe, who represents Adamawa-South in the Red Chamber, lamented the poor pension of retired police officers.

    “The inclusion and continuous stay of the NPF in the PenCom has placed them on the wrong end of the post-service emolument life, even though the Nigeria Police is saddled with the responsibility of not only protecting the lives and property of the citizenry but detecting crimes,” Yaroe said.

    On the face value, his argument is very seductive but it was all déjà vu because the issues he raised are as old as the CPS itself. Numerous public hearings have been organized by both chambers of the National Assembly on the issue of exemption. For instance, on February 22, 2022, the House of Representatives Committee on Pensions held a public hearing on two bills for the amendment of the Pension Reform Act 2014, with the first bill sponsored by Hon. Francis Ejiroghene Waive, seeking “to amend the Pension Reform Act 2014 to provide for the exemption of the Nigeria Police Force from the Contributory Pension Scheme and for related matters.”

    To be sure, nothing is wrong with calling for an enhanced retirement package for the police because when it comes to issues of welfare and salaries, they hold the wrong end of Nigeria’s emolument stick.

    But the low pension is neither the making of National Pension Commission (PenCom) nor NPF Pensions Limited. The pension is paltry because historically, police salaries remain embarrassingly measly. Therefore, the solution lies outside the exemption paradigm.

    Today, NPF Pensions is the most thriving police-affiliated institution because it is run by professionals from outside the police establishment, and not manacled by the asphyxiating police bureaucracy. Not only that, PenCom has carved for itself the niche of being the most efficient regulator in the country’s fiscal space.

    When the Pension Reform Act 2004 was enacted, the idea was to have a new scheme that is not only contributory and fully funded but also privately managed, with funds and assets based on individual accounts under third party custody. The overarching goal was to ensure, unlike in the Defined Benefits Scheme (DBS), that everyone who has worked receives retirement benefits as and when due.

    But the government, which modelled the country’s CPS after the Chilean scheme that exempted all its armed forces, retained the police while exempting the Army, the Nigeria Intelligence Agency (NIA) and the Department of State Security (DSS).

    The subsequent agitation for exit led to the incorporation of NPF Pensions on October 21, 2013, as a mono-clientele PFA exclusively responsible for the pension assets of all police personnel in Nigeria. It started operations a year later, making it the 21st PFA in accordance with the 2014 Pension Reform Act (PRA 2014).

    The PFA became a roaring success instantly. Today, not only is it the most successful police investment entity, it has become the measuring rod in the pension industry with Assets under Management (AuM) crossing the N1 trillion threshold, making it the fourth biggest PFA.

    Yet, the success has not deterred the exemption protagonists who seek to amend section 5 (1) of the Pension Reform Act of 2014, to include officers of the NPF as part of the categories of persons exempted from contributory pension.

    But exiting the CPS will not serve the ultimate goal of enhancing the welfare and wellbeing of officers and men of the Nigeria Police because that route will lead, once again, to the Defined Benefits Scheme which was abandoned in 2004 because of its impracticability.

    Exemption as being canvassed will also ultimately lead to the dismantling of the institutions, systems and processes that government has put in place towards the implementation of the pension reform scheme, in addition to upsetting government’s fiscal policy.

    Data from PenCom reveals that as at January 31, 2024, Nigeria’s pension fund assets stands at N19.531 trillion, which represents more than ten per cent of the country’s Gross Domestic Product (GDP). When contrasted with Federal Government’s budgetary pension deficit, estimated at N2 trillion as at June 2004 under the Defined Benefits Scheme, it will be suicidal to hearken to the exemption calls.

    Therefore, since the elephant in the room is the abysmally low pension of police retirees, which has to do with ridiculously low salaries, rather than legislating for exemption, the government should administratively address the issue of low wages through upward salary adjustment, maximizing the opportunity of the ongoing new minimum wage negotiation. As Aisha Dahir-Umar, PenCom director-general, once noted, “Pension is a function of salary, and as long as the salary of officers continues, then there is no need to exit.”

    What needs to be done?

    At a three-day investigative hearing by the House of Representatives Committee on Pensions in March 2020, measures were articulated by Dr. Sule Wuro Bokki, former Managing Director of NPF Pensions, which if taken, will holistically address the plight of police retirees and mitigate the constant clamour for exit.

    The first is a presidential approval of special gratuity for police retirees at the rate of 300 per cent of their last annual gross pay so that the balances in their Retirement Savings Account (RSAs) will be channeled towards their monthly pension payments. This will be in accordance with Section 4 (4) of the Pension Reform Act which provides that an employer, notwithstanding the provisions of the Act, may agree on the payment of additional benefits to the employee upon retirement. The second is treatment of retired police officers from the rank of AIG and above as public officers who should retire with their full benefits, as it is the case with permanent secretaries.

    Besides, the major challenge faced by pension managers is the backlog of accrued rights owed by the Federal Government. Pension is made up of the accrued rights, which is the service rendered by policemen to the Federal Government from the time they enrolled in the CPS in 2004 and only payable when the officer serves notice of retirement, and the contributions from both the employee and employer.

    But because the accrued rights are huge, the illiquid Federal Government opted to pay in instalments every year. But the snag is that unless that is received, the PFAs cannot pay the portion that is with them because the account has to be consolidated. Right now, the accrued rights have not been paid in over 15 months, which means that no policeman that retired in almost two years has been paid pension. The government may find a way of paying the accrued rights of retired officers separately to mitigate the delay.

    These issues should be addressed administratively by the government. The National Assembly is in a pole position to facilitate the process rather than legislating for the exit of the police from the CPS, a move that will destroy not only the thriving NPF Pensions Limited but also dismantle the entire contributory pension infrastructure and take Nigeria back to the impracticable Defined Benefits Scheme era. It will also orchestrate a fiscal disaster when the federal government, once again, is saddled with the sole responsibility of shouldering the burden of paying police pensions. Not only is such a prospect not feasible given the terrible state of the country’s economy, it will amount to shadow-chasing.

     

    Ikechukwu Amaechi, a journalist, is the publisher of TheNiche online news platform

  • Ex-NAICOM boss denies FG tampered with pension funds

    Ex-NAICOM boss denies FG tampered with pension funds

    Mr Olorundare Thomas, the immediate past Chief Executive Officer, National Insurance Commission (NAICOM), says the Federal Government has not borrowed from the accumulated pension funds.

    Speaking on Monday in Lokoja  at a public lecture of the Federal University, Lokoja, (FUL), Thomas expressed concern about insinuations that the Federal Government tampered with  the pension funds.

    The theme of the lecture is: “Insurance Solution In Wealth Creation and Sustainability” as it concerns  economic development of the country.

    The ex-NAICOM boss explained the economic challenges in the country did not translate to the Federal Government tampering with the pension funds.

    “Some situations change and challenges occur that interrupt or prevent the build-up and re-investment of wealth among citizens of a nation.

    “In spite of the best laid plans, life incidences and surprises will continue to happen.

    “These surprises, called risks, often require the diversion of resources away from created wealth.

    “The optimality of resources is the true definition of an economic growth centered on a real growth without creating other significant economic challenges or without negative effect on other sectors of the economy.

    “There is no doubt that wealth in minerals and human resources can  also partially define the wealth of a nation.

    “But the misconception that countries with vast natural resources will  translate to automatic economic growth, creation of jobs, increase government revenues.

    “This will help to finance poverty alleviation and many other positive reflections of the true dividend of development may be a mirage,” he said.

    According to him, statistics have  shown that some countries that are without natural resources grow at about four times more rapidly than other resource-rich countries.

    “It is simply because the dynamics for determining the wealth of a nation is changing.

    “This is why we are inundated with  the reality of embarking on adventures that will guarantee, not only creation of wealth but also ensuring its sustainability.

    “It is important to note that the insurance industry is one of the few sectors that continues to record growth in spite of the economic recession and the impact of the COVID-19 pandemic in 2020.

    “From a premium of N282 billion in 2015, the Nigerian insurance industry generated gross premium income of N616.1 billion in 2021, N789.7 billion in 2022 and a record breaking N1.003 trillion as at the end of December 2023.

    “Also, the asset of the Nigerian insurance industry grew from N827.5 billion in 2015 to N2.5 trillion in 2022 and N2.7 trillion as at December, 2023.

    “It is, therefore, comforting that the insurance industry is now more willing to meet the needs of the insuring populace through insurance solutions and products,” he said.

    He said that NAICOM was a statutory agency of the Federal Government established by the National Insurance Commission Act 1997 to regulate and supervise the Nigerian insurance sector and so serve as  adviser to the government on all insurance related matters.

    Earlier,  the FUL Vice-Chancellor, Prof. Olayemi Akinwumi, described the ex-NAICOM boss  as a seasoned insurance expert whose choice for the university’s seventh distinguished public lecture was apt and timely, considering the economic condition of the country.

    “Thomas is a seasoned professional whose extensive experience and profound insights have significantly contributed to  development of the insurance industry in Nigeria.

    “His topic is not only timely but also pivotal to our understanding of how strategic financial planning can drive sustainable economic growth.

    “In a world that is increasingly complex and filled with uncertainties, the role of insurance cannot be overstated.

    “It serves as a safety net that allows individuals and businesses to take calculated risks, innovate and invest in opportunities that drive wealth creation.

    “Moreover, insurance mechanisms are crucial in ensuring  sustainability of these ventures by mitigating potential losses and facilitating recovery in the face of adversity, ” he said.

  • Some pensioners still earn N4,000 monthly – NLC

    Some pensioners still earn N4,000 monthly – NLC

    The Nigeria Labour Congress (NLC), Borno State chapter, has said that some retirees in the state were still being paid N4,000 monthly as pension.

    The NLC Chairman, Mr Yusuf Inuwa, said this in an address to mark the 2024 May Day celebration, on Wednesday in Maiduguri.

    He advocated for upward review of the pension to improve the social and economic wellbeing of retirees.

    “Your Excellency, we wish to table before you that as at this moment there are some pensioners who are still receiving N4,000 as pension per month which is grossly inadequate.

    “We, therefore, pray for His Excellency intervention for upward review of the monthly pension”, Inuwa pleaded.

    He also called for the implementation of the national minimum wage, payment of outstanding leave and transport grants to local government employees in the state.

    The NLC chairman, who noted the commitment of the workers towards the transformation agenda of the state government, lauded the Babagana Zulum’s administration for the feat achieved in the area of workers’ welfare.

    He listed some of the achievements to include implementation of promotion benefits to workers in the mainstream, payment of gratuities to families of deceased workers, and provision of subsidised buses for workers and members of the public.

    Also, the State Chairman of the Trade Union Congress (TUC), Mr Babayo Hamma, urged the state government to adopt the minimum wage aporoved by the Federal Government.

    The state deputy governor, Alhaji Umar Kadafur, lauded the harmonious relationship between labour and the state government.

    Kadafur who listed some of the training opportunities provided for the workers including the N2 billion free interest facility, reiterated government to the welfare and training of workers.

    Also, Prof. Ibrahim Umara of Political Science Department, University of Maiduguri, who highlighted the theme of this year’s May Day, “The People First”, called for proactive active measures to address energy crisis in the country.

    He urged government to adopt siund policies that would enabled the Dangote Refinery,  to supply fuel at a subsidised rate to service local consumption.

  • Mutfwang inherited N4.6bn salaries, pension arrears in LGAs – Commissioner

    Mutfwang inherited N4.6bn salaries, pension arrears in LGAs – Commissioner

    The Plateau Ministry for Local Government and Chieftaincy Affairs, says that the Gov. Caleb Mutfwang-led administration inherited N4.6 billion salary and pension arrears from the previous administration.

    Mr Ephraims Usman, Commissioner for Local Government and Chieftaincy Affairs, made the disclosure on Tuesday in Jos, at a ministerial press briefing organised by the Ministry for Information and Communication.

    Usman said that the ministry made the discovery during a familiarisation tour of the 17 LGAs to inspect projects and ensure that they were utilising their monthly allocation efficiently.

    The commissioner said that so far, N1.7 billion primary teachers’ arrears had been cleared.

    He also said that N1.2billion out of the more than N1.6 billion arrears of local government council employees had been paid.

    “Out of the over N1billion local government pension arrears inherited, only about N300 million is still outstanding.

    ”Efforts are however, being made to clear all the outstanding arrears of the LGA staff and their pensioners within the next few months.

    “The ministry, in collaboration with the Association Local Governments of Nigeria (ALGON), purchased 35 Hilux vehicles for Operation Rainbow, to strengthen the security architecture at the grassroots level.

    “The ministry also paid N200 million inherited outstanding allocation to Operation Rainbow.

    “The ministry, along with the 17 LGAs management and their labour unions, signed an agreement for the payment of wage award of N12,000 each for three months to teachers, LGA workers, and pensioners,” he said.

    Usman further said that the ministry conducted the selection and coronation of the new paramount ruler of the Ngas people (Ngolong Ngas) on first class status.

    According to him, the selection of the new paramount ruler of Garkawa (Mou Youm of Garkawa) was done on second class status, adding that his coronation would soon take place.

    He added that the ministry, in conjunction with the 17 LGAs, was working on the digitalisation of indigene forms and marriage certificates with link to the beneficiary’s National Identity Number (NIN).