PenOp: Police Pension Bill Retrogressive, Unsustainable

James Emejo in Abuja

The Chief Executive, Pension Fund Operators Association of Nigeria (PenOp), Mr. Oguche Agudah, has said the bill to Create a Police Pension Board is retrogressive and unsustainable.

He insisted that the Contributory Pension Scheme (CPS) remained the most transparent pension arrangement in the country.

In a statement, the PenOp boss stressed that the police exemption from the CPS could further subject the fiscal space to severe pressure as it would require over N2 trillion annually to manage the scheme.

He pointed out that under the CPS, “There is clear visibility into the number of retirement benefits disbursed by all the PFAs. In contrast, other pension schemes operated in the past, outside of this framework, lack such transparency. The police are pushing to go back to this non-transparent system.”

The statement further explained that the withdrawal of the police from the CPS would entail a return to the defined benefits scheme, which would lead to the dismantling of the institutions, systems, and processes that the government had established to manage pensions effectively.

Agudah said the reversal could be highly counterproductive and undermine the progress made so far in pension reforms.

According to him, “This would only add more financial burden on the government through unsustainable pension obligations that it has already made provision for through a private sector managed pension scheme.

“Unwinding investments destabilize the financial system, diminish assets, and jeopardize the retirees themselves. Moreover, it disrupts fiscal policy and creates an unstable financial system.

“The beauty of the CPS is that the benefit that accrues to one member within the scheme can be enjoyed by all the members. A standalone pension management system as the police is advocating will not benefit from this pooling effect.”