BY NGOZI ONYEAKUSI

DG, PenCom

The National Pension Commission (PenCom) and Pension Fund Operators Association of Nigeria (PenOp) have given reasons for strongly opposing the Nigerian Police Force’s (NPF) agitation to exit the Contributory Pension Scheme (CPS), in favour of the Defined Benefit Scheme (DBS) insisting that CPS can address police pension concern without destabilising Nigeria’s financial system.

Advocating for sustainability of CPS, PenCom and PenOp highlighted the CPS’s pre-funded model where employer and employee contribute at least 18 per cent of salaries (8 per cent from employee and 10 per cent from the employer) to Retirement Savings Accounts (RSA) which has grown to over N24 trillion as at May 2025.

These were invested in bonds, infrastructure and other sectors, contributing to economic growth and ensuring long term pension sustainability. Reverting to DBS which relies on government budgetary allocations, risk fiscal unsustainability due to Nigeria budget deficits, delaying pension payments as seen in the pre- 2004 era, they said.

These organisations strongly noted that police exiting the CPS will require the government to fund pension for approximately 400,000 police personnel costing an estimated N3.5 trillion annually. This massive expenditure in a budget already straind by N13 trillion deficit in 2025, will divert resources from critical areas like infrastructure, minimum wage adjustment and public service, exercabating fiscal constraints. Outstanding pension liabilities including about N253 billion in accrued rights from pre-2024 DBS, further highlights the government struggle to fund pension without CPS contributions.

To address their concerns, they  therefore advocated increasing employer contributions,  even as they suggested that the Government could even decide to give the police retirees additional benefits all within CPS .

Recall that retired police officers under various groups and in some states on Monday staged peaceful protest, demanding their removal from the contributory pension scheme (CPS) and improved retirement benefits.

The protesters demanded the immediate passage of legislation that would establish a Police Pension Board.

The body, they said, would cater specifically to the peculiar needs and risks associated with policing, similar to what is obtainable for the military and intelligence agencies.

The elderly demonstrators carried placards and sang protest songs, expressing deep frustration over what they described as years of neglect.