The National Pension Commission is making arrangements to transfer N302bn pension funds of police officers under the Contributory Pension Scheme to the newly created NPF Pensions Limited, a Pension Fund Administrator, which will strictly manage pension contributions of the Nigeria Police Force personnel.
However, while some operators in the sector are sceptical about the impact that the new development is likely to have on the total pension asset in excess of N4tn, PenCom says there is no cause for alarm as the decision will be in the best interest of all stakeholders.
The commission recently held a consultative meeting with the licensed PFAs operating in the country on the need for them to transfer the police funds in their custody to the new PFA.
Some operators, who spoke on the planned transfer, said there was a need for PenCom to consider the risks taken and efforts of the PFAs previously holding the police pension funds in the registration, asset creation and value addition made over the last years of evolving the CPS.
An operator, who spoke with our correspondent on the condition of anonymity, noted that following the exit of the military from the CPS, the loss of police assets totalling N302bn, would be a significant drawback on the PFAs.
“The potential loss of income is about N5bn per annum collectively. This will invariably have attendant knock-on effect on the overall operation of the existing PFAs to varying degrees,” he said.
He urged the commission to consider some of the recommendations made by the Pension Fund Operators Association of Nigeria such as the fact that the NPF Pensions Limited should be restricted to managing only pension contributions from the Nigeria Police Force, both now and in the future.
The police, he added, should be restricted to enrolling new employees for now, until the transfer window would be opened, at which point officers and men could choose to move, or compensation be given by the NPF Pensions Limited to the existing PFAs in the form of asset purchased as in the case of operator buy-outs.
“We must also ensure the transfer of N302bn assets cash and near cash form to a single player within a short time does not cause systemic risk for the market,” he said.
However, the Acting Director-General, PenCom, Mrs. Chinelo Anohu-Amazu, said following the enactment of the Pension Reform (Amendment) Act 2011, which exempted military and State Security Services personnel from the CPS, the Nigeria Police and other agencies agitated for exemption from the scheme.
She said, “However, the Federal Government decided after careful consideration of the submission made by the Nigeria Police that the police personnel should remain under the CPS and that the NPF should seek administrative solutions to the grievances of their personnel within the framework of the scheme.
“Accordingly, after extensive consultations with the commission, the authorities of the NPF decided to incorporate a limited liability company, NPF Pensions Limited, and apply to the commission for a licence to operate as a PFA exclusively for the Nigeria police personnel in order to address their peculiar concerns.”
Source: Punch (by Nike Poopola)
