• Contact Us
  • About
  • Advertise
  • Privacy & Policy
Monday, March 27, 2023
  • Login
  • Register
Business Post
E3P Motor Insurance
  • Home
  • Insurance
  • Pension
  • Business Unlimited
  • OIL & ENERGY
  • Feature
  • News
  • Home
  • Insurance
  • Pension
  • Business Unlimited
  • OIL & ENERGY
  • Feature
  • News
No Result
View All Result
Business Post
No Result
View All Result
Home Pension

Exchanging Police CPS For Moribund DBS Will Reinstate Unsustainable Pension Funding- PenCom

Staff Reporter by Staff Reporter
March 4, 2022
in Pension
0 0
3
Pension: Pandemic Flips The Future With Apps For Better Services
0
SHARES
54
VIEWS
Share on FacebookShare on TwitterShare on WhatsApp

The current moves by the Nigeria Police to jettison the Contributory Pension Scheme (CPS)through a bill at the National Assembly, will create a deluge of challenges says the National Pension Commission (PenCom), and insists the Contributory Pension Scheme has provisions that can address the challenges being faced by personnel of the Nigeria Police and other federal government agencies on the administration of their retirement benefits.

The Director General of PenCom, Aisha Dahir-Umar, (pictured) said this on Tuesday in Abuja during a public hearing on two pension-related bills by the House Committee on Pension. She inferred that what the Police is seeking through its bill is licence to take a plunge into the abyss of pension and impose dire consequences on its retirees, disrupt the pension system, and by extension shrink development funding for the economy.

They are a bill for an Act to exempt the Nigeria Police Force from the CPS and a bill for an Act to further Amend the Pension Reform Act 2014 to, among other things, provide for a retiree to withdraw a lump sum of at least 75% from the Retirement Savings Account (RSA) and to criminalize undue delay in the payment of pension and for related matters.

“The solution to the pension challenges of the personnel of the Nigeria Police does not reside in their exemption from Contributory Pension Scheme and reversion to the Defined Benefits Scheme, which is clearly unsustainable,” Dahir-Umar told the Committee.

She said the absence of other social security benefits in Nigeria is partly responsible for the clamour by the retirees for exemption or to access substantial amounts as lump sum from their RSA balance.

The Director General said the exemption of the NPF from the CPS would result in the dismantling of the institutions, systems and processes that government had put in place in the last few years towards the implementation of the pension reform programme.

“Exemption of the personnel of the NPF would imply additional financial burden on the Federal Government by way of unsustainable pension obligations. For instance, as at September 2021, there were 304,963 Police personnel based on IPPIS data. An actuarial valuation revealed that the retirement benefits (pension and gratuity) liability of these personnel under the defunct Defined Benefits Scheme would amount to about N1.84 trillion,” she said.

On the other hand, she said that the liability under the CPS for the same NPF personnel is made up of N213.4 billion as accrued pension rights and monthly employer pension contributions of about N2.2 billion.

The Director General said to address the concerns of Police Personnel on pension, the employer can review upwards its current contribution rate of 10%.

In addition, she said the PRA 2014 further provides that notwithstanding the pension contributions made by employer and employee into the employee’s RSA, the employer may agree on the payment of additional benefits to the employee upon retirement.

“Accordingly, the Federal Government may wish to provide additional benefits in the form of gratuity to personnel of the NPF upon their retirement,” she said.

Meanwhile, regarding the 75% lumpsum payment, she said the amendment, if approved, would be contrary to the provision of Section173 of the 1999 Constitution of the Federal Republic of Nigeria (as amended), which guarantees the right to pensions for all public officers as the payment of “at least 75% of the balance of the RSA” as lumpsum at retirement defeats the constitutional provision.  She added that this will significantly deplete the pension savings such that the contributions will not be sufficient to provide meaningful pensions during retirement.

“That converts the pensions into a provident fund and leaves such a retiree with no periodic pensions, which is contrary to the requirement of Section 173 of the 1999 Constitution,” she said.

The Director General said the proposal is based on a misunderstanding of the concept of pension payment under the CPS.

Similarly, the Chief Executive Officer of the Pension Fund Operators Association of Nigeria (PENOP), Oguche Agudah, said the exemption of the Nigeria Police Force from the CPS would take Nigeria back to the dark ages before the pension reforms.

“This was a time when retirees had to depend on a defined benefit system; where the federal government paid monthly pensions to retirees directly from its coffers,” he said.

Agudah aid at the time of the reform, it was estimated that the Federal Government had a pension liability of over NGN 2 trillion.

“Past experiences have proven that this system puts a lot of burden on the federal government, making it unsustainable. The sustainability of moving the police back to the pay – as – you – go Defined benefit scheme under their proposal is near impossible, given the Federal government’s struggling finances at the moment.,” he said.

He recommended that from the rank of Assistant Inspector General of Police (AIG) upwards, their pensions should be treated under the category of political appointees who retire with full benefits as stated in the PRA 2014 as their appointments are political in nature.

On the Bill to allow contributors take at least 75% of their RSA balance at retirement, the PENOP’s CEO said the people that have issues with the lump sum that they collect at the moment are those who have not been able to accumulate enough funds in their RSAs prior to retirement.

He said what the 75% essentially is looking to achieve is a gratuity type payment to retirees, adding that the PRA in its current form does not  preclude the payment of gratuities by employers as many Department and Agencies of the Government already pay gratuity to their staff on retirement.

“What we suggest is that employers should be encouraged to pay gratuities at retirement and/or increase their level of monthly contributions in order to boost the balances and subsequent pension pay out of their staff,” he said.

Previous Post

African Alliance Open Claims Valve Registers N7.59bn Paid In 2021, Adopts Mixed Recapitalisation Plans

Next Post

Guinea’ Motor Insurance Now In Self Service Portal

Staff Reporter

Staff Reporter

Related Posts

Over 2,100 RSA Holders Make Maiden Dash For Transfer Window
Pension

PenOp Creates Bastion Of Effective Leadership For Pension Professionals

March 14, 2023
Preferred PenCom Logo
Pension

PenCom Knocks Lagos For Consistent Failure To Pay N2bn Monthly Commitment To Retirees

March 13, 2023
National Assembly Principal Officers Set To Strip Staff Of CPS Without Consent
Pension

PenOp Rails Against National Assembly Secret Bill To Exempt Own Workers From CPS

February 24, 2023
Next Post
Guinea’ Motor Insurance Now In Self Service Portal

Guinea' Motor Insurance Now In Self Service Portal

Comments 3

  1. David olagbenro says:
    1 year ago

    The police officers’ pay or benefits should be looked into for better life after retirement.
    They should also be educated of the options in the current cps , an officer can move his/ her fund to annuity for life instead of risk of outlive the fond under program withdrawal. Open their eyes please.

    Reply
    • Nwanne Ikemefune says:
      1 year ago

      Thanks for sharing your thoughts.

      Reply
  2. gate.io safe says:
    1 month ago

    Reading your article helped me a lot and I agree with you. But I still have some doubts, can you clarify for me? I’ll keep an eye out for your answers.

    Reply

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

NEM INSURANCE NEM INSURANCE NEM INSURANCE
  • Trending
  • Comments
  • Latest
ILAN Picture

Loss Adjusters Receive Charge To Match Speed Of New Developments

July 30, 2022
Custodian Investment To Acquire 51% Stake In UACN Property

Penetration: Operators Call For Insurance-In-Action

November 2, 2022
tope smart NIA former chairman

Insurance Milestone: A Beacon To Follow

April 3, 2022
ncrib logo

NCRIB And Universal In Pictures

August 23, 2020
Reinsurance Rates May Increase Into 2022, But Momentum To Wane: Fitch

Reinsurance Rates May Increase Into 2022, But Momentum To Wane: Fitch

April 13, 2021
Linkage Assurance Aligns With Brokers For Growth

Linkage Assurance Aligns With Brokers For Growth

December 6, 2021
Preferred PenCom Logo

PenCom Board Crafted To Hedge Setback

February 1, 2021
NCRIB Sets The Stage For Adaramola’s Tenure

NCRIB Sets The Stage For Adaramola’s Tenure

March 18, 2021
PenCom Approves Mrs Okwuosa New Access Pension Fund Custodian MD

PenCom Board Back-To-Work Pass, Gets Tick Over

February 1, 2021
PTAD Wipes 21,227 Parastatals Pensioners From Payroll

PTAD Wipes 21,227 Parastatals Pensioners From Payroll

January 31, 2021
How Strong Is The Reinsurance Sector Going Into 2021?

How Strong Is The Reinsurance Sector Going Into 2021?

6822
Scib CEO Tinubu

Professionals Want Value Dimension Added To Enhance Compulsory Insurance

6723
Allianz Claims Survey Shows Changing Claims Patterns

Internal Failures, Major Cause Of Cyber Claims

5377
Anchor MD Loses Father

Anchor MD Loses Father

1522
As Nat Cat Losses Mount A Resilience Mindset Matters More Than Ever

As Nat Cat Losses Mount A Resilience Mindset Matters More Than Ever

1492
Leadway Assurance Leads With ISO/IEC Re-certification

Leadway Assurance Leads With ISO/IEC Re-certification

957
NIID: Dare Project To Take back Motor Policy From Touts Still Surging Despite Odds

NIID: Dare Project To Take back Motor Policy From Touts Still Surging Despite Odds

919
PenCom Trigger Lifts Transfer System Off The Starting Block With Split Responsibilities

Pension Funds Encounter First Waterfall

385
Old Mutual Points Nigerians To Insurance-backed Savings Plans To Hedge Economic Volatilities

Old Mutual Points Nigerians To Insurance-backed Savings Plans To Hedge Economic Volatilities

333
National Assembly Principal Officers Set To Strip Staff Of CPS Without Consent

PenOp Rails Against National Assembly Secret Bill To Exempt Own Workers From CPS

311
Fitness Enthusiasm, NEM Insurance Spins Wellness In The Public Space

Fitness Enthusiasm, NEM Insurance Spins Wellness In The Public Space

March 27, 2023
Global Insured Natural Catastrophes Losses Hit US$100bn

Global Insured Natural Catastrophes Losses Hit US$100bn

March 27, 2023

Invest In Speaking Customers Language Not Yours, Insurance Industry Charged

March 26, 2023
NAICOM Head office

Insurers Claims Obligation Increases By 18% In Q4 2022, N244.3bn Paid

March 26, 2023
NAICOM Regulation Stirs Clear Of Wild Spin Focuses On Mid-Point With Policyholders And Operators

Nigeria’s Insurance Industry Gross Premium Muscle Lifts N776.2bn To Closs 2022

March 23, 2023
Image Spin: Diipo Olarenwaju Says Blockers Of Loss Adjusters Vital Role Will Be Challenged

Image Spin: Diipo Olarenwaju Says Blockers Of Loss Adjusters Vital Role Will Be Challenged

March 23, 2023
Tax Administrators Charged To Match The Pace Of Global Technological Advancements

Tax Administrators Charged To Match The Pace Of Global Technological Advancements

March 21, 2023
Ojumah’ Exploits Earn Induction Into Sanlam Pan Africa Council Of Elders

Ojumah’ Exploits Earn Induction Into Sanlam Pan Africa Council Of Elders

March 20, 2023

FIRS Feast Of MoU Snaps UK Counterpart

March 18, 2023
Guinea Insurance Sets For Return To Profit Turf

Guinea Insurance Sets For Return To Profit Turf

March 18, 2023

Recent News

Fitness Enthusiasm, NEM Insurance Spins Wellness In The Public Space

Fitness Enthusiasm, NEM Insurance Spins Wellness In The Public Space

March 27, 2023
Global Insured Natural Catastrophes Losses Hit US$100bn

Global Insured Natural Catastrophes Losses Hit US$100bn

March 27, 2023

Invest In Speaking Customers Language Not Yours, Insurance Industry Charged

March 26, 2023
NAICOM Head office

Insurers Claims Obligation Increases By 18% In Q4 2022, N244.3bn Paid

March 26, 2023
NAICOM Regulation Stirs Clear Of Wild Spin Focuses On Mid-Point With Policyholders And Operators

Nigeria’s Insurance Industry Gross Premium Muscle Lifts N776.2bn To Closs 2022

March 23, 2023
Image Spin: Diipo Olarenwaju Says Blockers Of Loss Adjusters Vital Role Will Be Challenged

Image Spin: Diipo Olarenwaju Says Blockers Of Loss Adjusters Vital Role Will Be Challenged

March 23, 2023
Tax Administrators Charged To Match The Pace Of Global Technological Advancements

Tax Administrators Charged To Match The Pace Of Global Technological Advancements

March 21, 2023
Ojumah’ Exploits Earn Induction Into Sanlam Pan Africa Council Of Elders

Ojumah’ Exploits Earn Induction Into Sanlam Pan Africa Council Of Elders

March 20, 2023

FIRS Feast Of MoU Snaps UK Counterpart

March 18, 2023
Guinea Insurance Sets For Return To Profit Turf

Guinea Insurance Sets For Return To Profit Turf

March 18, 2023
Image Spin: Farewell For Omolola Adekunle Bankole

Image Spin: Farewell For Omolola Adekunle Bankole

March 17, 2023
Seplat Energy Says Allegations Against CEO, Board Untrue, Misleading

Seplat Energy Says Allegations Against CEO, Board Untrue, Misleading

March 16, 2023
Transactional Risk Insurance Now Mainstream Product – Report

Transactional Risk Insurance Now Mainstream Product – Report

March 15, 2023
Over 2,100 RSA Holders Make Maiden Dash For Transfer Window

PenOp Creates Bastion Of Effective Leadership For Pension Professionals

March 14, 2023
Business Post

We connect brands with buyers and sellers of insurance, pension and also project insurance and allied Businesses to the trending generation. We help the various public to adapt to the constant changes as it would impact, and also enable advertisers to connect, engage and target opportunities on line , in print and in person.

Browse by Category

  • Business Unlimited
  • Feature
  • Insurance
  • News
  • OIL & ENERGY
  • Pension
  • Travel

Recent News

Fitness Enthusiasm, NEM Insurance Spins Wellness In The Public Space

Fitness Enthusiasm, NEM Insurance Spins Wellness In The Public Space

March 27, 2023
Global Insured Natural Catastrophes Losses Hit US$100bn

Global Insured Natural Catastrophes Losses Hit US$100bn

March 27, 2023
  • About
  • Advertise
  • Privacy & Policy
  • Contact

© 2023 BusinessPost

No Result
View All Result
  • Home
  • Insurance
  • Business Unlimited
  • OIL & ENERGY
  • Feature
  • News
  • Contact Us
  • About
  • Advertise
  • Privacy & Policy

© 2023 BusinessPost

Welcome Back!

Login to your account below

Forgotten Password? Sign Up

Create New Account!

Fill the forms bellow to register

All fields are required. Log In

Retrieve your password

Please enter your username or email address to reset your password.

Log In