The move by the National Pension Commission, PenCom, to transfer the N305 billion Police pension fund to the proposed NPF Pensions Limited has continued to generate criticism as financial analysts have insisted that the move is illegal and suspicious.
They also said that the action if hatched will jeopardise the future of men and women of the Police force after retirement, saying that it contravenes the Pension Reform Act, 2004.
Some analyst had raised the alarm that given the history of the fraud associated with police pensions, the N305 billion savings currently being managed by existing Pension Fund Administrators (PFAs) should not be moved to a new PFA to be known as NPF Pensions Limited.
Reacting to the fears of the analysts, PenCom, had through its spokesman, Mr. Emeka Onuora, assured that licensing of NPF Pensions Limited to manage the pension savings of men of the force pending the opening of the transfer window would not pose any threat whatsoever to the scheme.
However, a financial and legal analyst, Mr. Ayodele Adekunle, said in a statement that the federal government should re-consider the move because it does not only pose a threat to payment of men and officers of the NPF, but also moving the funds from existing PFAs contravenes the law which the government, itself, had put in place.
“We all are living witnesses to the stories about police pensions in this country and the N305 billion has professionally been managed under the pension reform over the years. Changing the status quo has so many risks and I believe the government should consider the demerits of this move before taking further action,” he said.
Adekunle explained that section 11(2) of the PRA 2004 gives every contributor the right to choose any PFA, stressing that the move by PenCom contravenes this provision and also raises some suspicion.
“Apart from the fact that moving the funds contravenes that section of PRA 2004, I am suspecting some foul play. The regulator is saying that after the transfer, the police personnel will have the freedom to transfer to the PFA of their choice after two years. To me, there is ulterior motive in this position. Instead of transferring the entire pension to a new PFA, the opportunity should be given to the police personnel right from day one so that they decide which PFA to use rather than compelling them to move to a new PFA and after two years they will transfer from the new PFA to any other one of their choice. This will not only be cumbersome but it is also doubtful,” the statement said.
Adekunle, therefore urged the government to re-evaluate the implications of the plan for the pension fund industry and future of the personnel of the NPF.