Pension: FG, stakeholders faults bill seeking to exempt paramilitary personnel

The Federal government has opposed the exclusion personnel of paramilitary services from the Contributory Pension Scheme (CPS) as proposed by a bill in the House of Representatives.

The government balked at the proposal of being responsible for the pension liabilities of personnel of anti-graft agencies and para-military services.

For emphasis, the Federal Government has issued a White paper prohibiting all Ministries, Departments and Agencies (MDA) as well as paramilitary from pulling out of the CPS to Defined Benefit Scheme (DBS), it was revealed.

The Speaker of the House of Representatives, Yakubu Dogara and others stakeholders Thursday at a public hearing on two pension-related bills warned  that to erode the gains of CPS that has over N6.4 trillion in its pool would attract avoidable consequences.

One of the bill seeks to amend Pension Reform Act, 2014, to exclude/exempt personnel of various paramilitary and anti-graft agencies from CPS, while the other was  for an Act to amend the provisions of the Pension Reform Act, to reposition the contributory pension scheme for effective service delivery.

If the exemption bill, sponsored by Oluwole Oke, who is also Chairman, House Committee on Public Procurement is passed into law, the Federal Government will take responsibility for the payment of 100 percent pension for personnel of Nigeria Police Force; Security & Civil Defence Corps; the Nigeria Customs Service; Nigeria Prisons Service; Nigeria Immigration Service; Economic & Financial Crimes Commission; Independent Corrupt Practices Commission; Nigeria Drug Law Enforcement Agency.

In his presentation, Roy Ogor, from Office of the Secretary to Government of the Federation (OSGF), who spoke on behalf of Federal Government, noted that provisions of the exemption bill is not in the interest of a sustainable pension programme for the country.

Saying that the bill should be discarded, Ogor opined that the National Assembly should not encourage legislations that would further compound the socio-economic challenges facing the country.

According to him, the Federal government would prefer the lawmakers strengthen the Pension Reform Act that has provision for increase in pension contribution by employers rather than the proposed amendment which seeks to exempt paramilitary personnel.

While he stressed that the government is only desirous of maintaining the extant arrangement, Ogor said public and private employers should be encouraged to meet their 18 percent pension obligations as provided in Pension Reform Act, 2014.

He however complained that public and private employers are currently struggling to comply with the current contribution of 18 percent as the lingering economic recession affect both public and private employers.

Nigerian Employers Consultative Association (NECA) advocated for introduction of ‘closed pension scheme’ for the paramilitary rather than outright exemption which he noted is detrimental to the well-being of the personnel of various paramilitary agencies.

According to NECA, the implementation of the DBS as proposed by the bill would be jeopardized as government cannot afford to wholly fund the pension of the paramilitary personnel due to inadequate funding.

The National Insurance Commission (NAICOM), the adviser to Federal Government on insurance matters, disclosed that the CPS has paid N180b annuity as at March 2017 thereby deepening the development of insurance in the country.

Earlier, Speaker Dogara warned against any attempt to destroy the legacy achieved through the contributory pension scheme.

Represented by the Chief Whip, Ado Doguwa, the Speaker said, “We are conscious of the fact that the pension industry has become a crucial sector that is playing a formidable role towards the development of the economy in terms of availability of huge investment funds of about N6.4 trillion provided by the scheme that could be deployed both in the real sector as well as in the capital market sector.

“Furthermore, the role effective pension administration plays in the general well-being of the pensioners cannot be over-emphasised and we as a parliament will always ensure that the efforts of those that labored for the fatherland will always be appreciated through regular and timely payment of pensions and gratuities.

“Any bill therefore that can improve both ends of the sector, that is, the pensioners’ wellbeing as well as the administration of the funds will always be favourably considered by the House.”

 

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