Retirees and prospective retirees of the Nigeria Police should not be allowed to exit the Contributory Pension Scheme (CPS) to Defined Benefits Scheme DBS, a Non-Governmental Organisation (NGO) Contributory Pension and Happy Retirement Advocacy (COPEHRA), has said.
It made the submission at the ongoing Public Hearing to Remove Police from the Contributory Pension Scheme (CPS).
A member of the NGO Project Advisory Team, Mahmud Ayinla, said the grievances of the police could be addressed in the CPS.
He said one of the problems is the poor monthly pension of an officer grade in CPS compared to his counterpart in DBS who gets pension pension.
He said this meant the government should increase the funding of the Retirement Savings Account (RSA), not to take over the pension payment.
Stating the reasons the police should not be allowed to quit the CPS, Ayinla, a lawyer, cited global best practice, issues of unfunded pension liabilities; statutory government disbursements/deliverables, sustainability and cost of governance, governance by regulations, transparency, and self-regulation.
He explained that since the global crisis in pension management, caused by funding, Latin America has led in policy reforms that have had their pensions management and administration switch from the pay-as-you-go/Defined benefit system to the CPS where workers and employers contribute to a fund to be invested in assets.
Ayinla added that the divergence in pension administration from its being the sole responsibility of the government or employer to a joint contributing system ( RSA) has been met with an increase in patronage and adoption world over, be it in the private or public service.
On the issues of unfunded pension liabilities, statutory government disbursements/deliverables, he noted that the government is saddled with the recurrent statutory expenditures as well as providing funding for capital projects.
On sustainability and cost of governance, he said there was no sustainability in budgeting for a monthly pension, adding that the sustainability of a non-terminal pension scheme such as the defined benefit scheme in the midst of the various modern challenges in a developing country like Nigeria is simply non-existent.