Virtually all security agencies  including the police, have begun a gradual process of pulling out of the Contributory Pension Scheme, a development which industry watchers say poses a major threat to the pension programme.

Some top managers of Pension Funds Administrators told our correspondent on Friday that the Nigeria Police Force had almost concluded the pull-out arrangement, just as the State Security Service, the Nigeria Customs Service and other paramilitary organisations were said to have commenced the process.

It was learnt that the various groups had notified their respective Pension Fund Administrators of the intention to opt out of the scheme and manage their own pensions.

This is coming a few months after the military withdrew from the scheme, saying they preferred the Military Pension Board to the CPS.

The decision of the police to withdraw from the pension scheme, it was learnt, had not received the support of the presidency.

The Senate committee on pension matters was also said to be looking into the matter, especially the legal implication.

A top official of the National Pension Commission, who spoke with our correspondent on Friday on the telephone, said the police were making moves to opt out of the scheme but had not got the necessary approval.

He said a crucial meeting on the matter was held with them and three options were made available to them.

He gave the options as either they would operate a closed PFA, an open PFA or an approved existing scheme.

He said, “The police went to PenCom asking to leave but PenCom said ‘No’.

“We are working with the police to work out a PFA for them, which can be closed, Open PFA or existing scheme.”

The Managing Director, AIICO Pension Managers Limited, Mr. Eguarekhide Longe, who confirmed that other paramilitary were also trying to pull out of the CPS, said that the action should be discouraged and urged the need to boost confidence in CPS.

He expressed worry that if these groups were being given approval to operate a close PFA, they would sign out and begin to manage their accounts.

The Director-General, Lagos State Pension Commission, Mr. Adekunle Hussain, also confirmed that the agencies already had existing pension offices and wanted to operate their businesses.

He said, “What I would advise is that if they want to operate on their own, they could operate like close PFAs, but adopt the CPS rather than sticking to the old scheme.”

According to him, the CPS was well managed, and it ensured mandatory savings, strict discipline and safety of contributed funds.

The Commander, Corps of Army Finance and Accounts, Maj.-Gen. Charles Airhiavbere, said the Nigerian Army withdrew from the pension scheme because of alleged disparity in the CPS.

Airhiavbere said the military personnel preferred the Military Pension Board to the National Pension Scheme.

He justified the army’s confidence in the MPB, saying the board had the necessary database for a better pension scheme for military personnel across the country.

Although the pension fund under the CPS has continued to increase, many contributors are grumbling over their inability to draw from their savings to meet immediate pressing needs.

This is, however, contrary to the intentions of the Pension Reform Act 2004, which seeks to unify all pension schemes in the country, under the regulation of the National Pension Commission.

Eight years after the scheme commenced, the pension funds hit N3.2tn at the end of 2012, making it the fastest growing funds in the financial sector.

After the military opted out of the scheme in 2012, the Police may follow suit, dragging the paramilitary groups.

Operators of the scheme are worried that despite the fact that the CPS has recorded rapid growth without any fraud thus far, the opting out of the military and paramilitary groups may adversely affect the set targets of the scheme.

Source: Punch (written by Nike Popoola)