POLICE PENSION AND MATTERS ARISING

The Police should strive for reforms under the contributory pension scheme 

A Bill for an Act to establish the Police Pension Board is currently before the National Assembly. It seeks to create a separate Board charged with the responsibility of paying pensions and gratuities to personnel of the Nigeria Police Force (NPF), including retirees who left service before the enactment of the law. While this move may appear to be a well-meaning response to the lingering challenges faced by police retirees, a closer examination of its implications reveals that it is a step in the wrong direction. Rather than exiting the Contributory Pension Scheme (CPS), we urge the NPF to pursue reforms within the existing framework to address its concerns.

One of the key motivations for establishing the CPS under the Pension Reform Act of 2004 (amended in 2014) was to address the persistent problems of the old Defined Benefits Scheme (DBS), including delays in payment, corruption, mismanagement, and the unsustainable financial burden it imposed on the government. Under the DBS, pension payments depended solely on budgetary allocations, and countless retirees were left without their entitlements for years. It was a system plagued by inefficiency, lack of transparency, and rampant fraud, as evidenced by the infamous Police Pension Task Team saga under Abdulrasheed Maina, which ended in financial scandal and worsened the plight of retirees.

 The CPS was designed to address these systemic failures by ensuring that retirement savings are accumulated during an employee’s working life, professionally managed by licensed Pension Fund Administrators (PFAs), and safely held by Pension Fund Custodians (PFCs). The system promotes availability, affordability, adequacy, and sustainability, the four pillars of any credible pension system. With over ₦18 trillion in assets as of 2025, the CPS is now one of Nigeria’s most robust financial systems, critical to national development and economic planning. The NPF already operates under the CPS, and its pension funds are managed exclusively by NPF Pensions Limited, a PFA established specifically for Police personnel. Instead of creating a new bureaucratic structure in the form of a Pension Board, which history has shown is vulnerable to political interference and mismanagement, the Police should strengthen the internal mechanisms already available under the CPS.

Section 4(4) of the Pension Reform Act 2014 provides a legal pathway for enhancing retirement benefits without exiting the CPS. It allows any employer, including government agencies, to increase their pension contributions or offer additional benefits through an Approved Existing Scheme (AES) or Additional Benefits Scheme (ABS). Agencies such as the Nigeria National Petroleum Corporation Limited (NNPCL), Central Bank of Nigeria (CBN), Economic and Financial Crimes Commission (EFCC), Federal Road Safety Corps (FRSC), and PenCom have all taken advantage of this provision to boost the post-service welfare of their personnel. For instance, the FRSC retains 40 per cent of its internally generated revenue for personnel welfare, including additional pension benefits. There is nothing stopping the NPF from adopting a similar formula.

Sections 26 and 27 of the Nigeria Police Act 2020 empower the Police to maintain a General Fund into which all internally generated revenue, including fees from police reports, special duties, and other income sources, is paid. The Act expressly permits this Fund to be applied towards the payment of pensions and other retirement benefits. With these provisions already in law, the Police do not need to exit the CPS. Instead, they should design a comprehensive exit benefits scheme within the CPS framework, funded from the General Fund, to address the key concern they have identified, which is pension adequacy.

To make the CPS work better for Police personnel, we suggest that their salaries be reviewed upward to reflect the high-risk nature of their duties. This would allow them to contribute more meaningfully to their Retirement Savings Accounts and live with dignity during service and in retirement.