Home Human NPF Pensions as veritable tool to enhance police welfare

NPF Pensions as veritable tool to enhance police welfare

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By Ikechukwu Amaechi To say that the police have for too long been the people’s bête noire is to say the fact. Yet, if there is any issue the #EndSARS protests which rocked the country in October brought to the fore, it is the other fact, which is, Nigerian policemen hold the wrong end of the welfare stick in the security circle.
Yet, without the police, security of lives and property will be grossly compromised, a reality which has placed Nigerians in a quandary.
So, what to do? Reform the institution and re-orientate its personnel. Nigerians unanimously agree that is the way to go. President Muhammadu Buhari does not disagree either. And his appreciation of this crisis and the urgency it demands is at the core of his vow to improve the welfare of Nigerian policemen.
But the problems are hydra-headed. Nigerian policemen have the misfortune of being paid very low wages. That is the biggest impediment against attracting skilled manpower into the force. As the common English idiom goes, “If you pay peanuts, you get monkeys.”
Worse still, not only are police officers poorly remunerated while in active service, in retirement, they don’t fare any better because of the historically low wages.


So, any policy aimed at addressing police welfare must be fundamental and not superfluous. It must assuage the agitation for equitable pension package commensurate with what colleagues in other ministries, departments and agencies (MDAs) get.
But the good news is that there are low hanging fruits which the government can harvest.
The average policeman is mortally afraid of the unknown: life after retirement. This fear informs most, if not all, of their most egregious conduct while in active service.
So, any attempt to address the welfare of the police must take a peep at the future. How can policemen be assured of a decent life after 35 years of service to fatherland?
Granted, there will always be bad apples, who, no matter what, will allow their greed overcome their sense of decency and fidelity to public good. But if policemen are assured of improved welfare in and out of service, it becomes a great disincentive for odious conduct.
And here, the Nigeria Police Force Pensions Limited – the Pension Fund Administrator (PFA) licensed by the National Pension Commission (PenCom) in accordance with the Pension Reform Act (PRA 2014) to exclusively manage the pension assets of all police personnel – has done a yeoman’s job in the last six years.
Even President Buhari acknowledged this fact on October 20, 2020 when he virtually commissioned the magnificent NPF Pensions House in Abuja, the first purpose-built corporate headquarters of any PFA in Nigeria.
Said he: “To the NPF Pensions Limited, I wish to applaud your company for instituting a Retirees Resettlement Support Scheme through which you provide some form of financial support to retired police officers to enable them to resettle fully in retirement after meritoriously serving the nation.
“Taking your services to the doorstep of police officers by maintaining an office in each police command and formation is also very laudable … I urge you to continue your untiring efforts in collaborating with the police authorities towards improving the welfare of both serving and retired personnel of the Nigeria Police Force.”
Both points are important. The NPF Pensions Limited is a child of necessity. The Nigerian government which modelled the country’s Contributory Pension Scheme (CPS) after the Chilean scheme that exempted both the armed forces and the police, insisted that the police will be part of its own scheme while exempting the military.
Before 2014, policemen were scattered in all the other 20 PFAs and even when the authorities requested exemption, the government demurred, insisting that the police institution was so big that it was not in the best interest of the country to let policemen out of the pension loop.
So, NPF Pensions Limited was a compromise whereby instead of letting the police exit the pension scheme, the National Pensions Commission (PenCom) in 2014 licensed a PFA exclusively dedicated to serve the police with a vision “to be the benchmark in Pension Fund Administration in Nigeria.”
Its mission, “To provide quality customer and financial advisory services to stakeholders and adopt investment strategies that would yield the best possible returns on their pension assets,” was even more ambitious.
Prior to its establishment, a large number of policemen on the CPS were neither receiving statements on their Retirement Savings Accounts (RSA) nor had any communication with the PFAs, and, therefore, didn’t know what was happening to their accounts.So, the first task of the new PFA was to get in touch with their clients by locating policemen wherever they were in Nigeria. Offices were set up in all the 56 police formations and commands across the country.


Working also through the police pension offices and six regional offices with pension desk officers, NPF Pensions took their services directly to the officers wherever they are located.To ensure that issues are addressed instantly, all the 62 offices are online, real time. It was a strategic move that not only eased the access of police officers to information, but also dramatically eased the stress of documentation by creating awareness.
For the first time, policemen could make enquiries on their Retirement Savings Account (RSA) from the comfort of their offices or homes by making use of self-service channels.

The goal was to ensure that every client was treated with respect and given priority attention regardless of rank. Then, the PFA ensured that policemen whose RSAs were either unfunded or underfunded were fully funded.
The result is phenomenal. Though the NPF Pensions is the 21st PFA to be licensed and came 10 years after the 20 others began operations in 2004, today, it is one of the five most performing PFAs in the country. 
Though it has received as at September 30, 2020, N240.93 billion as transfers for 259,831 contributors, its assets under management as at October 31, 2020 stood at N630.23 billion. For accrued rights, it has received N62.90 billion and paid retirement benefits worth N50.27 to 18,422 retirees. A total of N1.51 billion has also been dispensed under the Retiree Resettlement Support Scheme (RRSS) to 10,400 retired officers while N4.46 billion was paid as death benefits to 1,173 next-of-kin of deceased officers. N523.12 million was paid as programmed withdrawal to 15,855 retired clients in October 2020.
The Inspector General of Police, Mohammed Adamu, appreciates what the PFA has accomplished in so short a time. “NPF Pensions Limited has become one of the most successful companies to be established in the Nigeria Police Force,” by placing, within six years of existence, the footprint of the police in the pension industry, he said.
To be fair, assenting to the Bill establishing the Police Trust Fund as well as the Nigerian Police Act 2020, both of which address welfare issues in the police, are testimonies to Buhari’s commitment to reforming the police for optimal service delivery through an enhanced welfare system.
But the NPF Pensions has, nevertheless, come up with various policy proposals to improve the welfare of serving and retired officers, which the government has not given commensurate attention.
Those suggestions are the low hanging fruits Buhari must harvest now.
The PFA has made a case for the upward review of the accrued rights of police retirees to address low lump sum and low monthly pension and the recognition and treatment of police officers from the rank of assistant inspector-general of police (AIG) and above as public office holders who should retire with full benefits just like permanent secretaries, pursuant to Section 7 of the Pension Reform Act.
Buhari’s approval has also been sought for special gratuity for police retirees at the rate of 300 per cent of annual gross salary upon retirement so that the balances in their Retirement Savings Accounts (RSAs) will be channeled towards monthly pension payments and to bring them at par with their peers in the public service.
The request was anchored on Section 4 (4) of the Pension Reform Act which provides that an employer, notwithstanding the provisions of the Act, may agree on the payment of additional benefits to the employee upon retirement.And the PFA has advocated for a separate budgeting and remittance of accrued rights for police officers, arguing that grouping the police with other MDAs makes the process cumbersome. This is actually the big elephant in Nigeria’s pension room.Many retired officers can’t understand why they have to wait for months to access their retirement benefits and most times they blame, wrongly, their PFA for their ordeal. But the delay results from the inability of the government to release the accrued rights as and when due.
The contributory pension scheme comprises 7.5 per cent deducted from the salary of a public servant and the counterpart 7.5 per cent contributed by the employer – the government – and the accrued rights derived from the services such an officer rendered to the government.
Abuja’s inability to pay the accrued rights promptly is due to poor finances. Before the CPS was introduced in 2004, the accumulated pension liability was over N2 trillion for the public sector alone.
But the PFA is bridging this gap by providing its clients with quality financial advisory services and management continues to reinvent itself by adopting investment strategies that would yield the best possible returns on pension assets, which it then deploys in ensuring that retirees have better value for their contributions.It does this by utilising a portion of the annual profit as a welfare package – Retirement Resettlement Support Scheme (RRSS) – for retirees before their retirement benefits are paid.
The N500 million RRSS, a corporate social responsibility scheme, is not part of its mandate. In fact, till date, it remains the only PFA that gives back to its clients and it has become the ultimate game changer in the industry since it was approved by the NPF Pensions Board in 2017.
For Buhari to have singled out the RRSS for commendation in his October 20 speech, amplifies its significance. 
But police retirees, nevertheless, expect their benefits to be promptly paid after retirement. 


Unbundling the accrued rights remittance process as requested by NPF Pensions will solve this problem.
To ensure that every worker is meaningfully rewarded at retirement, the Pension Reform Act 2014 reviewed upwards the minimum rate of pension contribution from 15 per cent to 18 per cent of monthly emolument, where 8 per cent will be contributed by employee and 10 per cent by the employer. Unfortunately, six years after, this has not been implemented.NPF Pensions strongly believes that the implementation of the 10 per cent employer contribution for the police will significantly enhance an officer’s RSA balance on retirement and is, therefore, pushing hard for its implementation.On police welfare, NPF Pensions has workable solutions and has the president’s back. All Buhari needs do is walk his talk by approving the policy proposals already on his table.
Will that give Nigeria a police force populated by angels? Not at all. Angels live in heaven. But it will significantly point the personnel to the direction of a different work ethics and policing worldview.
In repositioning the police, both the president and the police apparatchik have an ally in the NPF Pensions. If they listen, they may well find out that most problems bedeviling the police have solutions already proffered by the PFA.
That is why everything must be done to preserve its one-client status because NPF Pensions Limited is the best advocate for enhanced police welfare. 
Policemen are better off if they speak with one voice. And their PFA gives them that collective voice and the leverage they need. Doing otherwise through the transfer window will run against the spirit of the PRA 2014. It will also be counterproductive.
Amaechi, a journalist, is a pensions expert

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