By Favour Nnabugwu
National Pension Commission, PenCom has confirmed that the Police is still in the Contributory Pension Scheme, CPS of the federal government.
PenCom affirmed the need to state that the Police has not left the scheme despite effort to pull out
The Commission said only the Military and the Judiciary are exempted.
Head, Benefit and Insurance, Mr. Obiora Ibezeago said that the Police was so big that it would not be in the best interest of the country to let policemen out of the pension loop.
“It is only the Military and the Judiciary that have been exempted. The Police has not been expected”.
The police wanted to be excluded from the CPS just like their counterparts in other security agencies such as the military.
In Section 5 (1) (a) of the Pension Reform Act 2014 to enable the Federal Government to take full responsibility for the payment of gratuities and pensions of all police retirees and remove the burden of contributing part of their salaries for their retirement benefit from serving police officers.
Regulators and managers of the scheme warned that allowing the police to exit the scheme would not only deplete the accumulated pension assets now in excess of N14.27 trillion as of June 2022 but also destroy a system that is already working and enhancing economic and infrastructural development of the country.
Obizeago noted that the current pension administration.has been designed to ensure better quality of life in retirement and therefore urged members of the public to take advantage of it.
On the other hand, the Head of Micro Pension Department, Mr. Dauda Ahmed, said that MPP was a veritable tool against poverty at old age, which he observed has been the worst challenge of people employed in the informal sector.
In his paper, “The Micro Pension Plan: Bringing Financial Security at Old Age to the Doorsteps of the Informal Sector,”
“MPP is the solution to old age poverty. This is a pension plan in which contributions are so flexible that they are done at one’s pace so that those engaged in the informal sector can have something to fall back on when they are old.
“MPP is voluntary and will improve the standards of living of the elderly, as it provides a regular stream of income of benefits at old age.”
” Pencom recognized that the income of those employed in the informal sector was irregular and that as such the MPP has been designed in a simplified way such that its contributions also had a leeway to make contributions when they have income, he said.
MPP, he explained, has been structured into two with 60 percent of the contributions going into the retirement benefit and the 40 percent going into a contingency account.
He further said that the 40 percent contingency segment could be drawn down at will, within two days of request, once the contributor had maintained the account for at least three months.
He added that based on the extent provisions of the Pension Reform Act, it was not possible to convert an account of a formal sector contributor to an informal one but that the provision could be reviewed in favour of those who would be interested in migrating to the informal sector accounts