Full Project – PENSION MANAGEMENT AND ADMINISTRATION IN NIGERIA: A REVIEW OF THE PENSION REFORM ACT OF 2004
On the passage of the revision reform act of 2004 by the national assembly and the signing into the law by the president Olusegun Obasanjo on July 14th 2004, the researcher developed interest in the pension reform act and delved into the detail of the pension management and administration act to address this issues the work is divided into five chapters.
The first chapter introduce the background to the study the problems of the study which was basically lack of funding for the old pension arrangement irregular payment of pension absence of a regulatory body to supervise pension matters the non contributory scheme existing previously lack of portability from one employment to another a total of six hypothesis (three each of null and alternate hypothesis) were formulated.
Chapter two reviewed the related literature in the research area by tracing the history of pension administration and management in Nigeria.
Types of pension funds, comparisons of the old scheme and the new scheme, modalities for appointing pension funds custodians, administrator and the benefits of the new scheme to pensioners.
Chapter three sets the research design and methodology to used fir the research area for the study, population for the study, the calculation of the sample size and sampling techniques. A sample size of 44 was calculated from a population of so. The chi square techniques were used in the data analysis and decision. Data collected from respondents were presented and analysis in the chapter four and the testing of hypothesis.
Chapter five is the summary of the finding of the researcher from the hypothesis tested the findings are as following.
1. The new pension scheme would ease the pension burden for employer of labour and in both the private and public sector
2. The new pension scheme would provide the necessary funding for the long-term industrial growth and development in Nigeria
3. The new scheme would not offset previous liabilities accrued in the past
In conclusion if the new scheme is effectively managed there would be influx of long-term fund into the capital market for capital development the research recommends the following.
1. An adequate computerization of the activities of pension fund managers and training of staff to that effect
2. Public enlightenment on the new scheme and its benefits
3. Employment of labour should ensure stability of staff employment and emoluments.
1.1 BACK GROUND OF THE STUDY
People need to be financially secured especially in their old age. Most people are not aware of the importance of financial security, which is an aspect of social security.
Social security also known as social insurance is the government programmer that helps workers, retired worker and families achieve a degree of economic security by providing cash payment to help replace income cross as a result of retirement disability, unemployment or death.
Social security has the major role of contributing toward social equilibrium and stability by aiming at making life more meaningful and qualitative to the citizens. Government is usually in change of such schemes not only because of the fundamental nature of the risks usually associated in such social insurance but also to indicate the direction for the private sector to imitate.
Social security plan was introduced in the 19th century other European and American Countries instituted social security programmer after the attainment of independence.
In Nigeria, the defunct National provident Act of 1961 funded the first National social Insurance programmer which aimed at providing cash benefits to the contributors to the scheme in the event of death or retirement of the contributions the Nigeria social Insurance Trust Fund (NSITF) was to replace National Provident fund. The fundamental provision of the pension reform Act of 2004 is the employment of the NSITF to set up pension fund Administrators (PTA) that would manage and administers all pension funds in Nigeria.
1.1 STATEMENT OF THE PROBLEM
Pure pension scheme involves series of periodic payment at retirement for an employees or his dependent in the event of death. This funding is very expensive hence usually taken up by Mult-national oil companies etc.
To this end Nigeria security insurance Trust fund (NISTF) established by degree 77 of 1993 to replace to old National Provident fund (NPF) and NSITF was established and managed by the federal Government for the private sector schemes. The NSITF was intended to be a social security schemes and the benefits and mostly geared toward as such.
Unfortunately, the NSITF suffered a great deal of poor public perception and a less than average level of compliance. A contributory scheme which mandated private employers of five and above to vomit 10% in the ration of 3.5 percent by employee and 6.5 percent by employers was hardly adhered to. for the personal pension plan employees in private sector also has the additional voluntary contribution arrangement whereby they were able to personally contribute to insurance companies in order to build on whatever their employers have in place for them this pension fund managers.
Several problem were associated to these old pension scheme that never made it work. Part of them includes;
i. Inadequate and kite funding of the scheme
ii. Poor administration and inadequate delivery structure.
Overwhelming liabilities of Pay as Go scheme rendering it unsustainable and poorly developed legal framework.
Also, most time increases in benefits were politically motivated and announced without consideration given to the actual valuation of the cost.
It becomes a sectors issue in the past recent years as more pensioners are falling dead on the endless given for unpaid pension. In the private sector, funding was better but structures were irregular and coverage very low. Regulation is not focus and most local private business did not precise pension benefits as a important component of an employee’s entitlement.
Another grave limitation in the private sets is the fact that the structure lacks the essential ingredients for portability form one employment to another. In almost all cases, employees collect their benefits whenever they switch job, most times spending such benefits on issues irrelevant to retirement. But to put things straight pension crisis was as a result of the unfounded public debts, poorly managed private sector and crisis in the management and administration of retirement benefit (gratuity and pension) both in public and private sector.
1.2 OBJECTIVES OF THE STUDY
The objectives of this research are
1. To examine the origin of pension burdened crisis in Nigeria.
2. To trace the origin of pension administration on Nigeria.
3. To also examine the reason for the failure of the pension scheme arrangement.
4. To examine and evaluate the new pension scheme arrangement.
5. To identify possible problems militating against pension management and administration in Nigeria.
Finally. To suggest ways of resolving the pension crisis and improving the management of pension in Nigeria.
1.3 SIGNIFICANCE OF THE STUDY
This research would aim at;
a. Enlightening employees, employers and retires on the new pension scheme.
b. Organizations like financial institution, non-financial institution, companies, regulatory and supervising agencies like National insurance commission (NATICOM), central Bank of Nigeria (CBN), NECA and Electricity Regulatory commission (ERC) etc. would again an insight on pension administration in Nigeria.
c. The research would be useful to other researchers who would be interested in researching in this area.
1.4 RESEARCH HYPOTHESIS
The much and alternative hypothesis are framed as follows.
Ho: 1 -> The new pension scheme would not ease the pension burden on employees and employers of labour.
Hi: I -> The new pension scheme would ease the pension on employees and employers of labour.
Ho:2-> The new pension scheme would not provider the necessary funding for long-term industrial growth and development in Nigeria.
Hi: 2-> The new pension scheme would provide necessary funding for long-term industrial growth and development in Nigeria.
Ho:3 -> The new pension scheme would not create poor ability and flexibility.
Hi; 3 -> The new pension scheme would create portability and flexibility.
1.5 SCOPE OF STUDY
The research would cover all the aspect of the old scheme arrangement and the new scheme as provided by the pension Act of 2004. The scope of the research would cover the deficiencies of the old pension scheme and how the new scheme will rectify these deficiencies. The research will also discuss the criticism of the new pension scheme and highlight the similarities and differences. Between the old and new pension scheme the area or scope of coverage is Nigeria.
1.6 DEFINITION OF TERMS
NPC – National Pension Commission. Also know as PENCOM
NSITF – National Social Insurance Trust Fund.
PFA – Pension Fund Administrations.
PFS – Pension Fund custodians
NECA – Nigeria Employers consultative Association
CIC – Capital issues commission now know as SEC
SEC – Securities and Exchange commission
CBN – Central Bank of Nigeria
MOF – Ministry of Finance
HOSF – Head of service of the federation.
B. Ekwu :A hand book on pension, 1995 pg 25
Frost, F.J. and Hager, o. p. (1986): A general introduction to industrial
Investment, Heine Man London pg 79-81.
Goffi F. C (1971): Theory and practice of investment 5th edition Heine Man.
London pg 65-68.
Akin boy Bode : The role of pension fund management in Nigeria “Business
Times” Feb 6, 2001. pg 36.
Chikelu G.P.O :New pension scheme takes effect” Jan 2nd Business time, out
19, 1992 pg 9.
Okafor F.C. Capital market. UBA position for superior service deliver.
Vanguard (Lagos) Feb 10, 2006.
The new pension reform Act 2004.
Get the Complete Project
This is a premium project material and the complete research project plus questionnaires and references can be gotten at an affordable rate of N3,000 for Nigerian clients and $8 for International clients.
You can also check other Research Project here:
- Accounting Research Project
- Adult Education
- Agricultural Science
- Banking & Finance
- Biblical Theology & CRS
- Biblical Theology and CRS
- Biology Education
- Business Administration
- Computer Engineering Project
- Computer Science 2
- Criminology Research Project
- Early Childhood Education
- Economic Education
- Education Research Project
- Educational Administration and Planning Research Project
- English Education
- Environmental Sciences Research Project
- Guidance and Counselling Research Project
- History Education
- Human Kinetics and Health Education
- Maritime and Transportation
- Marketing Research Project 2
- Mass Communication
- Mathematics Education
- Medical Biochemistry Project
- Organizational Behaviour
- Political Science
- Public Administration
- Public Health Research Project
- More Research Project
- Transportation Management
Full Project – PENSION MANAGEMENT AND ADMINISTRATION IN NIGERIA: A REVIEW OF THE PENSION REFORM ACT OF 2004