With pressure coming from the Federal Government for the transfer of an evaluated N302 billion in bulk, belonging to the personnel of the Nigeria Police Force (NPF) to the newly established NPF Pensions Limited, experts have disclosed that the Nigeria Pension industry with total assets of over N4.2 trillion faces a serious threat should this occur.

Implication of this move would see the statutory right of individual contributors, including police personnel, (to choose their PFAs by themselves) under the contributory pension scheme, as provided in the Pension Reform Act 2004, completely compromised. It further undermines the provision of the same Act, which allows movement from one PFA to another, only when the transfer window becomes operational.

Analysts, who spoke about the development, said impelling existing PFAs to transfer in bulk, a whopping N302 billion, to a new PFA belonging to the police, would create portfolio risks and endanger the stability of existing PFAs. They are of the opinion that the fact the police has had a long history of pension fund mismanagement and embezzlement makes matters even worse.

Obinna Chilekezi, principal partner, Independent Insurance Researchers, said the Federal Government or PenCom, cannot give such directive, considering the provisions of the law, otherwise they would have trampled on contributors right to elect PFA of their choice.

Chilekezi noted that such decision is capable of killing existing PFA’s, particularly those that have relied heavily on the police account.

“Government and the National Pension Commission (PenCom) should consider the risks taken, effort, and hard work of shareholders and management of existing PFAs in the registration, asset creation and value addition, made over the last seven years in building this fund”, he said.

An industry stakeholder who reacted to the development, said it would be very risky to move the contributions of the men and officers of the Nigeria Police, all at the same time, to a PFA that has not been tested.

“We have read and seen how police pension funds were embezzled, and nothing was done to recover them, or bring perpetrators to book. This is why government should not trade with the future and sufferings of Nigerians in the name of politics” the stakeholder noted.

2014-05-05