The Senate has passed the Bill for the Establishment of a Police Pension Board, a move that will balloon the federal government’s pension liabilities by N2 trillion, according to stakeholders in the industry.
The bill excludes the Nigeria Police Force (NPF) from the Contributory Pension Scheme (CPS) and returns the force to the old Defined Benefit Scheme (DBS).
Actuarial evaluations, according to industry stakeholders, indicate that it would cost the federal government an additional N2 trillion in pension liabilities for the 300,000 police personnel.
Under the contributory scheme, employees and employers contribute towards pension but the government takes full responsibility under the defined benefit scheme and this had led to irregular pension payments because of budgetary constraints for the federal government.
The upper chamber announced on its Twitter handle on Tuesday that it had passed the bill, despite opposition from industry stakeholders, 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) all opposed the bill.
