Business
Pension operators jittery over planned withdrawal of N283.9bn by Police, others
By Odunewu Segun
Operators of Pension Fund in the country are jittery over a planned withdrawal of N283.9bn by the Police and other para-military bodies from the Contributory Pension Scheme, National Daily has gathered.
A bill authorizing the exit has passed second reading at the House of Representatives and has been referred to a committee for further deliberations.
If it goes through, members of the Nigerian Police Force, Nigeria Customs Service, Nigeria Security and Civil Defence Corps, Nigerian Customs Service, Nigeria Immigration Service and the Economic and Financial Crimes Commission EFCC will manage their own pension schemes.
According to National Daily findings, members of the force felt they would make better returns running the scheme themselves. The military and Department of State Security (DSS) had few years ago pulled out from the scheme.
A pull out from the scheme, operators told National Daily means they would have to sell down their investments to fund the payments. This could lead to a sell down of assets they hold such as stocks and Federal Government bonds leading to a loss.
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National Daily gathered that a pull out by the police force for example, could lead to other agencies of government pulling out their own funds.. The smaller the number of assets managed, the lower the revenue the companies.
A withdrawal from the pension scheme means that government will be solely responsible for pension obligations. Government on its part may not be willing to do that as it currently struggles to fund a trillion Naira budget deficit.
Government may also not be keen to step into those shoes again due to previous issues it has had such as corruption and delay in payment of pensions. The Federal Government is currently struggling to meet its own share of pension obligations under the CPS, and has had to stagger the payments.
