The Senate has passed the Bill for the Establishment of a Police Pension Board, a move that will balloon the federal government’s pension liabilities by N2 trillion, according to stakeholders in the industry.

The bill excludes the Nigeria Police Force (NPF) from the Contributory Pension Scheme (CPS) and returns the force to the old Defined Benefit Scheme (DBS).

Actuarial evaluations, according to industry stakeholders, indicate that it would cost the federal government an additional N2 trillion in pension liabilities for the 300,000 police personnel.

Under the contributory scheme, employees and employers contribute towards pension but the government takes full responsibility under the defined benefit scheme and this had led to irregular pension payments because of budgetary constraints for the federal government.

The upper chamber announced on its Twitter handle on Tuesday that it had passed the bill, despite opposition from industry stakeholders, at the public hearing organised by the Senate Committee on Police Affairs on January 20, 2023.


The National Pension Commission (PenCom), which regulates the industry, the Pension Fund Operators Association of Nigeria and the Nigeria Labour Congress (NLC) all opposed the bill.

The former secretary to the government of the federation (SGF), Boss Mustapha, had written to the Inspector General of Police in January 2022 to reiterate that an SGF circular. Ref. 59149/S.1/C.1/11/266, dated July 20, 2021, which said the police must be under the Contributory Pension Scheme (CPS), remained in force.

The former SGF also referred to the White Paper on the report of the Presidential Committee on Restructuring and Rationalisation of Federal Government Parastatals, Commissions and Agencies which expressly forbade any government body, apart from the military and the intelligence services, from exiting the CPS.

In 2004, the Olusegun Obasanjo administration carried out a comprehensive pension reform to address the plight of pensioners who were always owed years in arrears.

Nigeria has moved from pension liabilities of N2.4 trillion to accumulated pension assets of N15.45 trillion as of February 2023.

But under this bill passed by the Senate, the federal government will now be fully responsible for police pensions.

LEADERSHIP recalls that Police retirees had cried out to the National Assembly to quickly pass the bill before it to enable them to exit from the contributory pension scheme which, they said, has impoverished them and subjected them to serious hardship.

The police retirees said the bill before the National Assembly would create a Police Pensions Board which would handle the retirement issues of the police, pointing out that their counterparts in the military and intelligence services had since exited the contributory pension scheme, with their pension matters being smoothly handled by boards created for that purpose.

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