PenCom dismisses tension on N4trn pension assets

The National Pension Commission (PenCom) said the permission granted by the Federal Government to the police to establish its Pension Fund Administrator (PFA), will not in any way affect the N4 trillion pension assets. 

A statement by Head, Communication Unit PenCom, Emeka Onuora, said the Federal Government did not grant the Nigeria Police the approval to pull out from the Contributory Pension Scheme (CPS), adding that the personnel of the Nigeria Police Force are still under the contributory pension scheme by virtue of Section 1 of the Pension Reform Act 2004.

The statement noted that the Whitepaper recently issued by the Federal Government on the report of the Orasanye Committee on the Rationalization of Federal Government Institutions clearly indicated that the Federal Government has accepted the recommendation that, with the exception of the Military which has already been granted exemption, no Federal Government Institution or Force should be exempted from the Contributory Pension Scheme.

It said it is pertinent to note that the NPF Pensions Limited, which is incorporated as a Private Limited Liability Company, will be managed independently by professionals who must satisfy the fit and proper persons due diligence requirements and approved by the Commission in line with the guidelines for appointment to board and top management positions of PFAs and PFCs, stressing that although the NPF Pensions Limited will be exclusively for police personnel, every police officer will, in line with section 11(2) of the PRA 2004, be at liberty to transfer to another PFA of his/her choice as soon as the transfer window is opened by the Commission.

“It would be recalled that following the enactment of the Pension Reform (Amendment) Act 2011, which exempted the personnel of the Military and State Security Services from the Contributory Pension Scheme, the Nigeria Police and other Agencies agitated for exemption from the Scheme,” the statement said.

It also noted that the Federal Government decided after careful consideration of the submission made by the Nigeria Police that the Police personnel should remain under the Contributory Pension Scheme and that the Nigeria Police Force should seek administrative solutions to the grievances of their personnel within the framework of the Scheme.

In the statement, “Accordingly, after extensive consultations with the Commission, the authorities of the

Nigeria Police Force decided to incorporate a limited liability company (NPF Pensions Limited) and apply to the Commission for licence to operate as a Pension Fund Administrator exclusively for the Nigeria Police personnel in order to address their peculiar concerns. Following a rigorous and thorough review of that application, the NPF Pensions Limited was found to have satisfied all the normal stringent A-I-P conditions without any concessions. Consequently, the Commission granted the NPF Pensions Limited an Approval-in-Principle for a licence to operate as a PFA.

“To ensure the smooth take-off of the NPF Pensions Limited, the Commission has developed an Operational Framework that will guide the reassignment of Personal Identification Numbers (PINs) and transfer of records of all Nigeria Police contributors to the NPF Pensions Limited, which would be spread over an 18 month period.

“Accordingly, in its usual consultative approach, the Commission has engaged and would continue to engage other licensed operators and stakeholders regarding the modalities of reassignment of PINs and transfer of records of officers and men of the Nigeria Police, with a view to ensuring a smooth exercise for the benefit of the pension industry.”

The statement however said it is instructive to note that the issue of threat to pension assets does not arise under the Contributory Pension Scheme because the management and custody of pension assets are respectively undertaken by separate licensed operators, namely the pension fund administrators and pension fund custodians, under the strict supervision of the Commission.

It added that the NPF Pensions Limited will operate like any other licensed PFA where the pension assets under its management will be held in custody by licensed PFCs under the supervision of the Commission.