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Ongoing efforts by the House of Representatives to exclude men and officers of all the para-military agencies from Contributory Pension Scheme poses great challenge for the country, if necessary precautions are not taken by policy makers.
The two legislative frameworks seen by BusinessDay, seek to amend Section 5(1a) of the Pension Reform Act 2014, with the view to removing members of the Nigeria Police, Nigeria Security and Civil Defence Corp (NSCDC), Nigeria Custom Service, Nigerian Prison Service, Nigeria Immigration Service as well as Economic and Financial Crimes Commission (EFCC) from paying the Contributory Pension Scheme.
Sponsor of the bills, Oluwole Oke (PDP-Osun) who doubles as chairman, House Committee on Public Procurement told our Correspondent that the intendment of the proposed exemption was to motivate the security agencies’ personnel.
Going by the import of the proposed amendment, the House of Representatives and indeed the National Assembly are to amend Section 291 of the Constitution of the Federal Republic of Nigeria, 1999 to reflect their exclusion while Federal Government takes over the payment on behalf of the personnel.
According to a recent Businessday publication on the PensionToday page: “The Bill has passed a second reading and has been referred to the House Committee on Pension for further legislative action.
Stakeholders in the industry who have looked at the development are concerned that taking these group away from the CPS would not only take pressure of paying pension back to government, it increases their risks profile because the structure that guided mismanagement of fund would not be there if it’s taken away.
According to an industry position, defended before some members of the Pension Committee in the House of Representatives, the Contributory Pension Scheme (CPS) operated under the Pension Reform Act 2014, was initiated to streamline and bring order to the structure of pension administration and management in Nigeria.
Primarily issues of non-funding of pension arrangements in both public and private sectors are comprehensively addressed in the PRA2014.
‘The separation of investment management and administration ( under the Pension Fund Administrator – PFA), from the custody of pension contributions ( under the Pension Fund Custodian – PFC), superintended by an overarching Regulator, was carefully thought to bring professionalism and necessary checks and balances to the system”.
Section 5(1) of the Pension Reform Act, 2014 provides that categories of persons mentioned in Section 291 of the 1999 Constitution (as amended) including members of the Armed Forces, the intelligence and secret services of the Federation, shall be exempted from the Contributory Pension Scheme.
Likewise, Section 5(2) of the Second Schedule stipulates that “any person who falls within the provisions of Subsection 1 of this Section shall continue to derive benefit under the existing pension scheme in accordance with the formula provided for in the Second Schedule to this Act or under the provisions of enabling laws.”
Similar bill which exempted the Military including Nigerian Army,
Nigerian Air Force and Nigerian Navy from the Contributory Pension Scheme led to the establishment of Nigerian Army Pension Board.
The Academic Staff Union of Universities (ASUU) is currently pushing for autonomous pension scheme administrator following the payment of the mandatory fee of N1 billion prescribed by National Pension Commission (PenCom).
The House had on Thursday, 8th December 2016, passed through Second Reading, a bill for an Act to establish the Nigerian Intelligence Agency Pension Board that will handle pensions matters for personnel if the agency and for other related matters. Section 3 of the bill provides that “there shall be charged on and paid out of the Consolidated Revenue Fund of the Federation, all such sums of money as may, from time to time, be granted by the Federal Government by way of pension and gratuity.”
Section 4 (a-d) of the bill, provides that any personnel of NIA shall be granted pension or gratuity after serving for 35 years or attained the age of 60 whichever is earlier, or on voluntary retirement after serving for not less than 10 years or on compulsory retirement.
The bill which was passed without any debate or contribution from members, was subsequently referred to the House Committee on Pensions for further legislative action.
Likewise, the House passed the bill for an Act to amend the Pension Reform Act, 2014 to exclude members of the Nigeria Police, Nigerian Security and Civil Defence Corp, Nigeria Customs Service, Nigerian Prison Service, Nigerian Immigration Service and Economic and Financial Crimes Commission from the application of the Contributory Pension Scheme.
Though the implication of the exemption may not be felt in the short-run, but will at no distant future required review for the purpose of ensuring security of the funds for the upkeep of the millions of personnel enrolled in the para-military agencies.
The sad experience from the misappropriated funds of misappropriated billions of Police Pension Funds, for which several investigative hearings were held by the Senate but till date remain inconclusive and the alleged misappropriated funds are yet to be recovered.
If necessary precautions are not taken towards protecting the sanctity of the Pension Reform Act 2014, such flaws may degenerate to civil unrest if the retirees from the paramilitary do not get their entitlements paid in good time.
In line with the legislative practice, after the proposals have passed through Third Reading, the House is expected to transmit them to the Senate for concurrence. If passed without discrepancies, the bills will be sent to the Presidency for assent.
