As it is the tradition, NPF Pensions Limited in early February commenced its annual nationwide pre retirement seminars for retiring policemen.
….. reports that it has been a rewarding exercise not only for the retiring officers but also those still in active service.
Peter Yaro Thliza, an Assistant Commissioner of Police (ACP), will retire early 2021 having dedicated the most productive period of his adult life to the service of fatherland.
Ordinarily, life in retirement, a period of sitting back to enjoy the fruit of one’s hard work, just like any other retiree, should call for celebration.
It is a period others look forward to with huge expectations. But not Thliza. He is apprehensive and looks forward to the future with trepidation.
At the conference hall of the Nigeria Police Force (NPF), Imo State Command, Owerri, where he attended a sensitisation workshop organised by NPF Pensions Limited recently, he raised three posers – all of which boiled down to what becomes of a policeman after retirement.
He was not alone as his concerns resonate nationwide.
To assuage this anxiety, the management of NPF Pensions Limited, led by the Managing Director, Hamza Sule Wuro Bokki, and the Commissioner of Police in charge of Pensions (CP Pensions), DCP Ibrahim Tarfa, are touring the six zones on a pre-retirement seminar for police officers retiring between January 1 and December 31, 2020. Included in the package is a sensitisation workshop for those still in service. The seminar speaks essentially to Thliza’s fears, the central theme being that retirement is real but is by no means a death sentence.
Instead, retirement is a period in one’s life to be looked forward to in buoyant mood but it needs to be planned for.
“Start preparing early in your career for the day of retirement, make savings, try your hands on some of the things you would like to engage in after service, make the necessary errors, it will be part of the learning curve, so that when you retire, you will not be out on a limb,” Bokki admonished in Lagos.
That message is the central theme of the “gospel of hope” that NPF Pensions Ltd is preaching to its clients – policemen – across the country.
Bokki, who has been on the driver’s seat since it was established six years ago, explains that the idea was to have a PFA exclusively responsible for pension assets of all police personnel, according to the Pension Reform Act (PRA 2014).
Child of necessity
NPF Pensions was a child of necessity. The 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 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 Ltd took its 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.
The annual pre-retirement seminar is in furtherance of this goal, an icing on the PFA’s administrative cake.
The 2020 edition kicked off in Lagos (South West) on February 3, and later moved to Port Harcourt for the South South zone. On February 18 and 19, the sensitisation train moved to Kano (North West) and berthed in Owerri (South East) on February 20 and 21.
Early next month, it will be the turn of the officers and men in the North East and North Central to hear from their PFA.
Taking services to police officers
The idea, Bokki explains, is to prepare police officers due for retirement in 2020 by interacting with them physically to acquaint them with their rights, entitlements and obligations before and after retirement.
“This is a PFA that is committed to addressing all the pension issues of the police and since our establishment, we have addressed most of the issues. Prior to our coming, even statements of account was a problem to police officers.
“They were not receiving statements of account, they never had any communications with the PFAs, and they didn’t know what was happening to their accounts. But when we came on board, we put them through, we got in touch with them, we located wherever a policeman is.
“We actually have offices in all the 56 formations and commands. We also work through the police pension offices, we have pension desk officers, and we have six regional offices.
“So, we have taken the services down to the policemen so that any issue that they have can instantly be addressed. And our 56 offices plus six regional offices, that is 62 offices, are online, real time. So, whatever we can do at the head office, our representatives can do on the field.
“So, this has eased access to pension information, it has eased access to documentation and the awareness has increased. We have taken the services to them, we have given them whatever they need at their point of location.”
Issues around accrued rights
But despite all these efforts, some concerns linger, hence Thiliza’s apprehension.
Some policemen are skeptical of the parameters used in calculating their retirement benefits even as some doubt whether the scheme guarantees the payment of pension for life.
Others are worried that in a country of runaway inflation, there is no guaranteed upward review of the monthly pension to reflect the realities of the time.
Policemen across the country also complain that there is no adequate provision for the welfare of widows and children of police officers who die in active service and limited access to contributed funds upon retirement.
There is also delay in the remittances of monthly pension contributions leading to loss of accruable interest. But the most serious concern seems to be delay in the remittance of retirees’ accrued rights and monthly pensions after retirement.
While some of these concerns are real, many are not. For instance, payment of pension is for life and not 10 years as some insinuate. To ensure this, there is a pension protection fund created to guarantee the life-long payment of pensions.
Again, pension is reviewed every three years and is therefore not static as has been claimed in certain quarters.
But some of these misconceptions are due to outright mischief; and the wrongful perception leads, most times, to blaming a PFA that is doing everything possible to put out the fire ignited by circumstances beyond its control.
For instance, while it is true that there is delay in the payment of pension benefits – the last payment was for December 2018, which means that nobody who retired since January 2019 has been paid – the fact remains that it is not the fault of NPF Pensions Limited.
The delay in the payment of pension is a consequence of the inability of the government to release the accrued benefits of the retirees since January 2019.
The contributory pension scheme presently comprises 7.5 per cent deducted from the salary of a public servant and the counterpart 7.5 per cent contributed by the employer which, in this case is the government (although going by the dictates of the 2014 amendment, government ought to contribute 10 per cent while the employees contribute 8 per cent); and the accrued rights derived from the service such an officer rendered from before the commencement of the CPS.
So, while the deductions and contributions are paid monthly into the RSA and officers get their statement of account every quarter, the accrued rights is only paid by the government when an officer serves notice of retirement.
The three are consolidated on retirement and unless the accrued rights is released by the government, the PFAs cannot pay retirees the portion that is with them. That is the crux of the matter.
Because the accrued rights has not been paid since January 2019, police officers who retired in the last one year have not been able to collect their pension.
Bokki stressed the point in Lagos, Port Harcourt, Kano and Owerri.
“What we have promised is that as soon as we receive retirees’ accrued rights, we will pay you promptly.
“What we expect from the federal government is the release of the accrued rights and as soon as they are released, we will pay promptly. “Today, when a policeman is paid, 7.5 per cent is deducted from his salary and 7.5 per cent is contributed. This is paid monthly. The accrued rights is the service they rendered to the federal government from the time they enrolled in 2004 when the contributory pension scheme took effect.
“That is what the federal government owes them. And it is only payable when the officer serves notice of retirement.
“But the amount is huge and the federal government does not have the liquidity to pay at once, so, it is paid in instalments every year. And unless that is received, we cannot pay the portion that is with us. The account has to be consolidated.”
The government’s inability to pay the accrued rights promptly is due to poor finances. Before the CPS was introduced, the accumulated pension liability as of 2004 was about N2 trillion for the public sector alone.
Thinking outside the box
And that is where the management of NPF Pensions has distinguished itself as a team that thinks out of the axiomatic box.
In line with the Inspector General of Police’s welfare focus, the NPF Pensions board in 2017 approved a N400 million annual Retiree Resettlement Support Scheme (RRSS) to cater for retirees while awaiting their pension.
Colossal as this sum is, it was still scaled up to N450 million in 2018 and it is paid retirees gratis according to their ranks and RSA balances to alleviate hardship faced while awaiting the remittance of accrued rights by the government.
Bokki explained at the seminar in Lagos that “it is a corporate social responsibility scheme that NPF Pensions has instituted. It is coming from our own internal funds. From the income we make, we expense N450 million and give it free to police officers.
“No other PFA is doing that and this is because we have a unique constituency. Most of the police officers live in the barracks and if there is any delay in the payment of accrued rights, they go into distress as soon as they leave service.
“So, we give them this little money to help them before the federal government releases their accrued rights and ultimate payment of pension.”
The NPF Pensions management is looking forward to the day when the RRSS purse will swell to N5 billion.
This is only possible because as the CP Pensions told retirees in Kano, “We manage your pension for profit.”
And they have done a good job. Since 2014, over 270,000 police officers have transferred from the other 20 PFAs to the NPF Pensions which was given a two-year moratorium and started paying out pensions from January 1, 2016. Since then pensions have been diligently paid on the 15th day of every month.
So far, NPF Pensions has received N230.90 billion as transfers for 255,504 contributors. But a breakdown of its assets shows that as of December 2019, it has N512.124 billion out of which it generated N161.193 billion profit.
For accrued rights, it has received N58.202 billion and paid N40.755 billion to 14, 617 retirees.
A total N1.179 billion has also been dispensed as support to 9,463 retirees while N2.715 billion was paid to 822 next-of-kin of dead officers while about N400 million is paid monthly as programmed withdrawal to retired clients.
In essence, most of the concerns raised by officers, serving and retired, have been addressed even without their knowing it because of the proactiveness of the PFA.
And that is the idea behind the annual pre-retirement seminar and sensitisation workshop: to explain to policemen what their PFA is doing with their money and how to prepare for life after active service.
After presentations, they are allowed to ask as many questions as concentrate their minds. Going by the reactions in the four zones already visited, most policemen now know better and are happy with NPF Pensions and its growth in the past six years.
Many now look forward to retirement. They no longer see it as a death sentence.
Neglected, poorly paid
Thliza, who gave the vote of thanks in Qwerri, said he was better informed after the workshop and thanked the NPF Pensions team for going beyond the call of duty to interact with them. “My people perish without knowledge,” he stressed.
But better awareness of what the PFA is doing does not diminish the fact that policemen have had an unfair deal in Nigeria compared to officers in other security agencies.
“There are a lot of problems,” moaned an officer in Owerri.
“Our service is like 35 years of imprisonment with hard labour. The job is too hard, yet we are most neglected and poorly remunerated.”
This is the battle cry of most police officers who are agitating for equitable pension package commensurate with what colleagues in other ministries, departments and agencies (MDAs) of government get.
Perhaps, most frustrating is the fact that even when pension is eventually paid, it is too paltry. Most of the officers at the seminar in Lagos lamented very low balances in their accounts.
Bokki said both the PFA and police authorities are aware of that wretched reality.
“The pension paid to police officers is low compared to other services,” he reiterated, and explained why.
“That reason is because, historically, their salaries have been low and since pension is a function of contribution, it has to be paltry because the salaries from which the contributions are taken are low.”
To address the problem, the PFA is urging the government to pay police retirees a separate gratuity for services rendered so that they can be brought at par with their colleagues and peers in the public service.
A letter of request for the approval of special gratuity for retired officers at the rate of 300 per cent of annual gross salary upon retirement has been sent to the president by the inspector general of police.
The NPF Pensions management is hopeful the president will give his approval. If this is done, it will be a game changer.
The PFA is also advocating for a separate budgeting and remittance of accrued rights for police officers. AbdulKareem Gezawa, Executive Director of Operations, said grouping the police with other MDAs makes the whole process cumbersome, with attendant delays.
To ensure that every worker is meaningfully rewarded at retirement, the Pension Reform Act, which came into effect in June 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, almost six years after, this has not been implemented.
Request for upward reviews
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.
Beyond all these, the PFA is championing two more causes – upward review of the accrued rights of police retirees to address both low lump sum and low monthly pension; and most importantly, ensuring that officers from the rank of assistant inspector general of police retire with full benefits, like permanent secretaries in the public service.
Most police officers who complain of holding the short end of the retirement stick and blame their PFA are unaware of these battles being waged on their behalf.
But Bokki said the management is not bothered because it is at the core of their mandate.
“Our goal is optimal maximisation of returns at minimum risk exposure. We want to secure the future of our hardworking and selfless policemen and the NPF Pensions Limited remains their hope for a better tomorrow. And we will do everything possible to guarantee them that glorious future in retirement.”
Officers to plan ahead of retirement
But for a seamless transition, policemen have some obligations also.
Unfortunately, living in the barracks, most lack the culture of savings, and while in service, they hardly can afford the time to develop other competencies that will put them in good stead when they drop their uniform.
Tarfa admonished retirees in Kano to shed their lethargic garment because pension is a very serious issue.
“A time will come when we will leave the comfort of our uniforms and offices for retirement, yet a lot of us don’t take retirement very serious.
“Many policemen tend not to give a thought to life after retirement when they are still in service. There is no preparation for the day which will surely come after either 35 years in service or on attainment of 60 years of age.
“The consequence is that life after retirement becomes a drudgery at best, or at worst a death sentence, literally,” he complained.
But Bokki insisted that need not be. In the four zones visited so far, he prefaces his speech with a congratulatory message to retirees who have reached a milestone in their lives, graduating from active service to senior citizens.
“Retirement does not mean an end to active life. No! In fact, some people have found more meaning in life after retirement, becoming more productive and richer because they have the time to engage in more profitable endeavours,” he said in Lagos.
But he agrees that officers need to prepare, hence the pre-retirement seminars and sensitisation workshops.
“The essence of the exercise is to prepare police officers that are due to retire this year. We interact with them. We tell them their rights, their entitlements and their obligations in the sense that there are certain documents that they have to fill themselves.
“The data recapture exercise is ongoing, the PenCom verification has opened, and we use the exercise to inform them of what to expect from us – the NPF Pensions Limited, what to expect from PenCom and the federal government.
“So, we take them through all the documentations that they need to do, prepare them and to encourage them to come forward and talk to us. Some of them have numerous issues, some are complaining of low balances in their accounts, some are complaining that they have not yet finished with the Data Recapture Exercise (DRE).
“All these we will facilitate for them, and we will help them so that they will have a smooth retirement and exit from the force.”
These are important because to access pension after retirement, all RSA holders are required to update their information by completing the DRE and other verification exercises which PenCom introduced to harmonise records with the National Identity Management Commission (NIMC), resolve multiple registrations which delay payment and address zero RSA balances and under-remittances.
Many policemen are not aware that they are to notify the PFA when they are promoted so that deductions will reflect their new salaries. When this is not done, it results in low RSA balances. Some wait until after their exit from service before embarking on documentations. This also delays payment.
But the seminar is designed to ensure that does not become the norm by correcting the anomalies.
“We have been trying to prepare the policemen to say, retirement is real, start early to prepare for it. At least five years, 10 years before retirement, you should start planning. Where do you plan to live after retirement? What are you going to do in retirement?
“You cannot just sit down doing nothing, because after retirement, you are still useful to your country, you are still useful to your community. You can engage in a lot of lawful things in retirement – farming, consultancy services, etc.,” Bokki emphasised in Lagos.
Hope for a better future
That message resonated loudly in the four zones visited. It will indubitably resonate in the remaining two in the coming weeks.
And most of the retirees are paying attention.
Most heartwarming is that in doing all these, Tarfa reiterated at every stop what has become the guiding principle of their operations.
He said: “NPF Pensions Limited is wholly committed to the welfare of its clientele, personnel of the Nigeria Police Force and their next of kin, and as such, no client is required to make any payment to the company, its employees or any person purporting to be acting on behalf of NPF Pensions Limited, as a condition for accessing any of its services, ranging from simple enquiries to processing and payment of retirement benefits.”
The mood of police officers is aptly captured by ASP Abdul-Amin Mohammed, who enthused in Kano that “NPF Pensions Limited is indeed proving to be our hope for a better future.”Read Full Story