POLICE WITHDRAWAL FROM CPS: A RETURN TO THE PAST, RISK OF FINANCIAL MISMANAGEMENT
Olushoga Adedokun
Before the establishment of the CPS under the Pension Reform Act of 2004, pension administration in Nigeria was a disaster. The Police Pension Office, under the old Defined Benefit Scheme (DBS), became synonymous with one of the most shameful frauds in public sector history. Millions of naira meant for retirees were siphoned through ghost accounts, and legitimate pensioners died waiting for their entitlements.
Creating an independent Police Pension Board threatens to reopen this unfortunate chapter. Without the layers of accountability and regulatory safeguards currently provided under the CPS, the system becomes vulnerable to the same institutional weaknesses that previously allowed massive fraud to flourish. No one needs to be reminded that corruption, if unchecked, will always find a way to flourish in silos.
The CPS is a pooled, multi-sectoral system that benefits from economies of scale. Through the aggregation of funds from millions of contributors across public and private sectors, the system ensures reduced administrative costs, access to large-scale investment opportunities, and higher returns for all contributors. If the police were to operate a standalone scheme, they would lose access to these economies of scale. This could lead to higher administrative expenses, lower investment returns, and ultimately, smaller retirement benefits for officers. A fragmented pension administration creates duplication of effort, inefficiencies in fund management, and a bloated bureaucracy, issues that the CPS was specifically designed to correct.
Under the CPS, the National Pension Commission (PenCom) serves as the regulatory watchdog, ensuring that funds are managed transparently and professionally by licensed Pension Fund Administrators (PFAs). Separating from this structure would significantly weaken oversight and create room for opaque practices. The proposed Police Pension Board is likely to lack the institutional independence, investment governance, and public scrutiny currently embedded within the CPS framework. This opens the door to politicisation, internal conflict, and abuse, an outcome that would defeat the very purpose of pension protection.
The PFAs under CPS are managed by professional fund managers who strictly adhere to investment guidelines set by PenCom. These funds are deployed across diversified investment portfolios to optimise growth and protect contributors’ assets. By contrast, a newly created police-managed scheme is unlikely to have the same capacity, experience, or regulatory backing to match this level of performance. With fewer resources and limited market leverage, the potential for poor investment decisions is high, which could lead to depressed pension payouts for police retirees. Worse still, the likelihood of political interference in fund investment decisions could jeopardise returns entirely.
One of the key achievements of the CPS is the reduction of payment delays. Under the old system, it was common for retirees to wait months, or even years, before receiving entitlements. With the CPS, benefits are pre-funded and structured to ensure that retirees access their funds shortly after retirement. Creating a new scheme means dismantling an already functioning infrastructure and replacing it with one that is likely to be plagued by teething problems, including unclear structures, delayed legislation, administrative bottlenecks, and a lack of financial readiness. This could place serving and retired police officers in a prolonged period of uncertainty, precisely what the pension reform was designed to eliminate.
Pulling out of the CPS is not just a matter of desire; it is a complex legal and institutional process that would require legislative amendments, funding frameworks, board appointments, and administrative structures. This would take years to establish and millions to operationalise. The transition period alone could expose police pensions to tremendous risk, with neither the old nor the new systems entirely in place to meet obligations. The inherent instability of such a transition would serve no one, indeed not officers nearing retirement who need assurance that their benefits will be safe, predictable, and timely.
If the police succeed in exiting the CPS, what prevents other uniformed agencies, such as Civil Defence, Immigration, and Prisons, from making the same demand? The result would be a disjointed pension landscape with multiple independent schemes, each with its own management and funding demands. This fragmentation would undermine the cohesion, simplicity, and efficiency that the CPS was designed to promote. More dangerously, it could reintroduce the culture of entitlement and government bailouts, which placed an unbearable burden on the national budget in the past.
The CPS is arguably one of the most far-reaching and effective public sector reforms in Nigeria. It replaced an unsustainable model with one built on accountability, savings, and financial discipline. Allowing the police to exit undermines the integrity of this reform and signals to other sectors that national policy can be cherry-picked based on pressure rather than principle. Instead of destroying what has been built, the focus should be on improving it, especially in areas where the peculiarities of the police force may not be fully captured. Dialogue, reform, and institutional responsiveness are far more effective than total departure.
An independent Police Pension Scheme is likely to be government-funded, directly or indirectly, especially during crises or shortfalls. This would reintroduce the fiscal burden that the CPS was designed to eliminate. It risks becoming another drain on national revenue and increases the probability of government default, leading again to unpaid pensions and distressed retirees. There is no doubt that the Nigerian Police deserves a pension system that reflects the hazardous nature of their job and the sacrifices they make daily. Nevertheless, the way forward is not through fragmentation or isolation; it is through reform within the CPS, ensuring better representation, improved efficiency, timely benefit payments, and tailored policies for officers.
Rather than exit, the police should advocate for special provisions within the existing framework, such as risk-weighted contribution rates, accelerated benefit processing, and designated PFAs with a mandate to cater to uniformed services. These are achievable goals, without putting the retirement security of thousands at risk. Let us not trade progress for sentiment, or stability for nostalgia. The CPS may not be perfect, but it remains the most viable path toward a just, efficient, and secure retirement system for all, including the police.
Olushoga Adedokun, a former pension administrator, lives in Lagos.
