Operators in the pension sectors have said the only permanent solution to exit agitations by officers of the Nigerian Police Force is to review their salary upwards, which will directly affect their monthly payments into their retirement savings account.

The recommendation by the operators is coming on the heels of recent protests by Police Officers over poor pension payment and exit agitations.

Daily Trust reports that retired police officers on Monday in many parts of the country took to the street to protest alleged abysmal pension entitlements paid to members after over three decades of law enforcement duties to the nation.

In Abuja, the retired officers, who took their protest to the Louis Edet House, Force Headquarters, and National Assembly Gate in the nation’s capital, ventilated their grievances to the Police authorities and leadership of federal lawmakers.

The protesting officers also demanded the removal of Police Pension from the contributory pension scheme.

Back story

Daily Trust reports that the Nigerian Police Force have long agitated to exit from the Contributory Pension Scheme (CPS), citing low remittance.

However, the move has been opposed by key stakeholders in the pension sector including Pension Fund Operators Association of Nigeria, the National Pension Commission and other key stakeholders.

The Bill to establish a police pension board to administer pension of police officers was passed at the end of the 9th national assembly in 2023.

However, former President Muhammadu Buhari declined assent to the Bill.

Fast forward to 2024, the senate reintroduced the bill for the establishment of a police pension board sponsored by Senator Binos Yaroe, senator representing Adamawa south.

Yaroe argued that the police, whose principal duty is to protect lives and property of citizens, does not enjoy pension schemes like other security agencies.

The Adamawa senator said the aim of the bill is to place the police on the same level with other security agencies.

The Inspector General of Police, Kayode Egbetokun, in November kicked against the bill seeking to exempt the Nigeria Police from the Contributory Pension Scheme (CPS) saying that it will not favour the Police Force.

Egbetokun who stated this while addressing some police officers noted that if the police exit the CPS, they will go back to square one.

He submitted that he is working on a pension scheme where every police officer will retire with his salary.

“When I became IG, I set up a committee to look into the pension issue and we discovered that the bill awaiting the assent of the President does not favour us. If we exit the present Contributory Pension Scheme, we are going back to square one, where we were before the introduction of the scheme. Our pension will be subject to budgetary allocation every year and when the government does not have money, you will not be paid,” Egbetokun had said.

What pension operators are saying

Reacting to the development in a chat with Daily Trust, Chief Executive Officer of Pension Fund Operators Association of Nigeria, Oguche Agudah, called on the Federal Government and police hierarchy to review the salary structure and welfare of police officers as a way of resolving the lingering issues of poor pension and gratuity.

He noted that the amount retired police officers are getting under the Contributory Pension Scheme is determined by their monthly salaries while in active service.

“Your pension under the Contributory Pension Scheme is a function of your salary and poor pensions paid to retired officers have to do with the issue of welfare in the Nigerian Police Force generally.

“Also poor officers who encounter stagnation in terms of promotion would over time record low contribution and poor payout during retirement,” he noted.

He proposed that one of the ways to tackle the problem of poor payout is for the Federal Government or the police hierarchy to review the process and increase the contribution for the police force from the current 10 per cent to about 20 per cent

According to him, under the current arrangement of the CPS, employees contribute about 8 per cent while the employer contributes 10 per cent of the monthly salary.

He said in the case of sudden disengagement before reaching retirement, an employee under the scheme would have access to his or her Retirement Saving Account (RSA), while the fate of those under DBS would be determined by the police pension board in such a situation.

According to him, the board is usually not transparent.

“Under the CPS, there are many safeguards. What we are saying now is how do we increase the contribution,” he stated.

“It doesn’t matter whether you move to CPS or DBS; pension is a function of your salary.

“We need to look at the issue of pay across police structure and welfare generally,” he added.

He said successive governments have not paid the pension under the DBS because they didn’t have the money for it.

Citing a scenario, he continued by saying, “To understand this, consider the case of an Inspector II in the Nigeria Police Force, their total remuneration which is at approximately N160,000 per month. However, pension contributions under the CPS are not calculated on the gross remuneration but rather on the “pensionable” portion, typically comprising the basic salary and select allowances. For many officers, this pensionable amount falls within the range of N50,000 to N60,000 monthly.

“Under the CPS, the officer contributes 8% of this pensionable salary, while the Federal Government, their employer contributes 10%. Using N60,000 as a benchmark, this results in a monthly contribution of N4,800 from the officer and N6,000 from the government totaling N10,800 that goes into the officer’s Retirement Savings Account (RSA) every month. Over a 10-year period, even with stellar investment returns, the accumulated value in the RSA will reflect the relatively low starting base of contributions.

“The fundamental challenge here is not the CPS itself, but rather the systemic issues that limit the growth of officers’ pensionable earnings. Many officers remain on the same rank for several years, with limited promotions and stagnant salaries. This stagnation means their pension contributions and by extension, their retirement benefits, remain modest under the CPS regardless of how long they serve. It is crucial to understand that pension outcomes are a direct function of contributions, and contributions depend on salary progression,” Agudah further explained.

He further revealed that returning the Police officers to the Defined Benefit Scheme will only put the federal government in fiscal crisis.

“Calls to abandon the CPS in favour of returning to the old Defined Benefit Scheme (DBS) may appear attractive on the surface, but they come with serious fiscal consequences. If the Nigeria Police Force were to exit the CPS, the federal government would immediately face an estimated liability of over N3.5 trillion to cover accrued pension obligations under the previous DBS. Such a financial burden would exert significant pressure on public finances and does not guarantee better pension outcomes for police retirees,” he added.

Efforts to improve officers’ welfare underway – IGP

Meanwhile, Daily Trust also reports that the Inspector-General of Police, Kayode Egbetokun, had told retired police officers that removing them from the Contributory Pension Scheme (CPS) is beyond his power, even as he assured them of ongoing efforts to improve their welfare.

Addressing the protesting officers at the force headquarters, Egbetokun expressed empathy and acknowledged that the issue of poor retirement benefits is a growing concern even for those still in service.

“We all feel concerned. We empathise with you because we are also going to retire. I have been engaging at the highest level to ensure that something is done to improve the condition of the poor pension,” he said.

The police chief disclosed that he had just returned from a meeting with the National Security Adviser, Nuhu Ribadu, where the welfare of retired officers was extensively discussed. (Weekend Trust)