Stakeholders in the pension industry have asked the National Assembly to throw away two controversial Bills seeking to exempt the police and paramilitary agencies from the Contributory Pension Scheme (CPS), as well as the Bill seeking to increase lumsum withdrawal from 25 percent 75 percent.
This was the development at one a day public hearing on Bill for an Act to amend the Pension Reform Act 2014 held yesterday at the National Assembly Abuja.
They argued that the exemption Bill if allowed to be passed into law will further plunge the nation into more pension liabilities, as the current economy of Nigeria cannot sustain a defined benefit scheme where government will have to bear 100 percent of pension payment to employees.
While they also believe that allowing employees who are not up to 50 years of age to access 75 percent of the balance in their Retirement Savings Account (RSA) will undermine the essence of the pension reform, and will further impoverish the retirees at old age.
Stakeholders spoke in favour of throwing away the Bills include the Nigerian Union of Pensioners, The Nigerian Labour Congress, the Trade Union Congress, the Central Bank of Nigeria; Office of the Secretary to the Government of the Federation, the Securities and Exchange Commission, Certified Institute of Pensions and the Central Bank of Nigeria (CBN) and the National Insurance Commission (NAICOM).
Other who also spoke against the Bills includes the Centre for Pension Rights Advocacy, Pension Operators Association of Nigeria (PenOp), PTAD and the National Pension Commission (PenCom).
The paramilitary officers who turned out en mass to cheer on their Bill however got more enlightened on the operation of the CPS, as many people including the former director general of PenCom, Mohammad Ahmad opened up their eyes on where the pension industry was coming from, and why the country cannot go back to the old days.
Adamu Shinkawu, chairman, House Committee on Pensions who took over from the Chief Whip of the house said what happened at the public hearing is “an experimentation of democracy”, where everyone has had the opportunity to give their opinion.
He said it’s clear that majority of Nigeria’s are beginning to see the benefits of the CPS, assuring that every single contribution will be looked into.
Abel Afolayan, president, NUP said the successes recorded in the pension reform cannot be taken for granted, given where the country is coming from.
“We cannot afford to go back to the days of corruption riddled pension scheme”.
He warned of an incessant and haphazard amendment of the PRA 2014
Ayuba Wawba, NLC President who glowingly spoke against the two bills said “In the surface of it, these Bills are good, but in the reality they will doom the nation”.
“We cannot sustain a system that takes us back to the old scheme because we do not have the budgetary allocation”.
David Igbodo, director legal, Nigeria Police Commission said the Policy are not part of those seeking to exit from CPS, rather that its Pension Fund Administrator has done very well.
Igbodo said its earlier concerns were being addressed by the PFA and the National Pension Commission.
Oluwole Oke, member House of Representative had on 16th May 2017 commenced sponsorship of a Bill seeking to “Amend the Pension Reform Act 2014 to exclude members of the Nigeria Police, The Nigerian ‘Security and Civil Defence Corps, Nigeria Customs Service, Nigeria Prison Service, Nigeria immigration Service and The Economic and Financial Crimes Commission From The Application Of The Contributory Pension Scheme and Other Related Matters”, was very unnecessary.
The above mentioned Bill, which is similar in context to that of the Armed Forces and Intelligence agencies, seeks to FULLY exempt the stated organisations from the CPS and return them to be 100 percent underwritten in relation to pension arrangements by the Federal Government of Nigeria. In other words, return them to the erstwhile Defined Benefit arrangement.