Police Pensions: Reform, Not Regression-By Ibrahim Shehu Musa
“Therefore, rather than dismantle a system designed for transparency, funding sustainability, and legal protection, energy should be redirected toward improving police remuneration, enhancing welfare, and ensuring timely and full compliance with contribution requirements”
The recent agitation by some serving officers of the Nigeria Police Force (NPF) to exit the Contributory Pension Scheme (CPS) and revert to the old Defined Benefits Scheme (DBS) has stirred national attention and triggered policy debates across the country. While the frustrations fuelling this agitation are valid, particularly in light of the financial challenges many retired officers face, the proposed solution is not only flawed but also potentially dangerous. Instead of abandoning the CPS, Nigeria should pursue thoughtful reforms within the system that address the unique realities of police service.
The call to exit the CPS stems largely from dissatisfaction with the perceived inadequacy of monthly pension payouts. However, as the National Association of Retired Police Officers of Nigeria (NARPON) rightly emphasised in a recent press briefing, the problem lies not in the structure of the CPS itself, but in systemic issues such as historically low salaries, delayed government contributions, and lack of supplementary schemes for police retirees.
It is essential to recognise a fundamental truth: pension outcomes are directly tied to the earnings generated during active service. Whether under the CPS or DBS, a low salary base inevitably leads to modest retirement benefits. Therefore, rather than dismantle a system designed for transparency, funding sustainability, and legal protection, energy should be redirected toward improving police remuneration, enhancing welfare, and ensuring timely and full compliance with contribution requirements.
Calls for a return to the Defined Benefits Scheme (DBS) overlook the historical failures that necessitated its abandonment in the first place. The DBS was plagued by chronic delays in pension payments, resulting in many retirees being denied timely access to their entitlements. It was also marked by widespread corruption, the presence of ghost pensioners, and gross mismanagement of funds. The system relied heavily on already overstretched government budgets, making it unsustainable and unreliable. For public servants, especially police officers, the result was a deeply demoralising retirement experience, often defined by uncertainty, financial hardship, and prolonged suffering.
One need only recall the discredited Police Pension Task Team under Abdulrasheed Maina to understand the deep-rooted rot that plagued the old system. It was these shortcomings that gave birth to the CPS through the Pension Reform Act 2004, later amended in 2014, which introduced a more sustainable and transparent model.
Under the CPS, funds are professionally managed by Pension Fund Administrators (PFAs) and safeguarded by Pension Fund Custodians (PFCs), with strict oversight by the National Pension Commission (PenCom). The CPS has grown to manage over ₦18 trillion in assets, supporting national development and infrastructure while guaranteeing individual retirement savings.
The current Bill before the National Assembly proposing the creation of a Police Pension Board is a move to exit the CPS. This proposal, while well-intentioned, could inadvertently resurrect the same inefficiencies, corruption, and fiscal unsustainability that previously plagued the DBS.
Key concerns surrounding the proposed exit from the Contributory Pension Scheme include the heavy reliance on government allocations from the already overstretched Consolidated Revenue Fund. This dependence raises fears about the long-term sustainability of pension payments. Additionally, there is a significant risk that pension funds could become subject to politicisation and mismanagement, echoing the inefficiencies of the past. The move could also lead to the duplication of administrative structures, introducing more bureaucracy and reducing efficiency. Perhaps most critically, allowing one agency to exit the scheme could set a dangerous precedent, encouraging other sectors to demand similar treatment and ultimately undermining the entire foundation of Nigeria’s pension reform efforts.
The Police already have a dedicated PFA, NPF Pensions Limited, specifically designed to manage their pension assets within the CPS. Rather than discard this structure, efforts should focus on optimising it. The current Contributory Pension Scheme (CPS) already offers flexible mechanisms that can be tailored to address the unique needs of the Nigeria Police Force, without necessitating a complete exit from the scheme. For example, Section 4(4) of the Pension Reform Act 2014 permits any employer to contribute beyond the statutory minimum or to provide additional retirement benefits to its employees. This means the Police Force can enhance its personnel’s retirement packages within the existing framework.
Furthermore, Sections 26 and 27 of the Nigeria Police Act 2020 provide for the establishment of a General Fund, which pools revenues generated internally, such as those from police reports and special duties. This fund, by law, can be used to supplement and enhance police pensions.
Several government institutions, including the Central Bank of Nigeria (CBN), Nigerian National Petroleum Company (NNPC), Nigeria Deposit Insurance Corporation (NDIC), Federal Road Safety Corps (FRSC), and Economic and Financial Crimes Commission (EFCC), have taken advantage of this flexibility by introducing Approved Existing Schemes (AES) or Additional Benefit Schemes (ABS) within the CPS. These have significantly improved the post-retirement welfare of their employees. The Police Force has every opportunity to adopt a similar strategy, remaining within the CPS while simultaneously improving retirement outcomes for its officers.
NARPON has advocated for increasing the Federal Government’s contribution to Police Retirement Savings Accounts from 10% to 20%, in addition to the 8% from officers, thereby raising the total monthly contributions to 28%. This is a sound, practical measure. Moreover, PenCom’s recent announcement of a nationwide upward review of pensions under the CPS, along with its recommendation for a 100% gratuity payout at retirement, demonstrates that the system is responsive, adaptable, and evolving, rather than rigid.
Another significant development is the proposed disbursement of ₦758 billion in pension shortfalls owed to security agencies, pending approval by the National Assembly. If released, this funding would significantly improve the retirement welfare of both serving and retired officers. While the frustration is real, resorting to protests over pension structure is a high-risk move, particularly for a security agency entrusted with national order. Industrial action or public protests by the Police could erode public trust and threaten stability. Instead, stakeholders should prioritise constructive dialogue, strategic lobbying, and policy engagement, as NARPON continues to advocate for.
While the Contributory Pension Scheme (CPS) may not be flawless, it is grounded in core principles of sustainability, transparency, and accountability, principles that were notably absent in the now-defunct Defined Benefits Scheme (DBS). Rather than seeking an exit from the CPS, the Police Force should focus on securing a better deal within the existing system.
This approach entails ensuring the full release of outstanding pension contributions, increasing the employer’s share of contributions, and establishing supplementary pension schemes to boost post-retirement income. It also requires institutional strengthening of NPF Pensions Limited to enhance its operational efficiency and capacity, thereby better serving police retirees. Most importantly, it calls for sustained engagement with the National Pension Commission (PenCom) and policymakers to advocate for reforms that reflect the unique needs and risks associated with police service.
To the National Assembly, the message is clear: Do not undo two decades of pension progress. Strengthen the CPS, support reforms that recognise the unique sacrifice of the Police, within the framework of what already works. To the Nigeria Police Force, the path is not backwards into a broken past, but forward into a reformed, responsive, and fair pension future. To the public, stay informed and lend your voice to sustainable policy. This is about more than pensions; it is about fairness, responsibility, and national resilience.
Ibrahim Shehu Musa, a pension consultant, sent this piece from Kaduna.
