ABSTRACT
The broad objective of the
study is to assess the pension reform agenda of Olusegun Obasanjo
Administration 2004; a study of Federal Ministry of Interior, Anambra State.
The descriptive research method was used in carrying out the study, the method
was chosen because it is the method that best interprets the study without loss
of facts. The research findings revealed essentially that;
i. Government has not worked
out the modalities properly on the separation from the erstwhile old scheme
from the new one.
ii. The
reform agenda depends on government’s yearly budgetary allocations, which also
depends on who is in control of the machinery of government and the revenue
condition’s of the Federal government.
iii. The
obvious escalating expenditure of government in other areas such as education,
agriculture, health and administration that compete with pension expenditure,
government can not be trusted to solely pay pension.
Based on the
findings, major recommendations are that;
i.
Government should try as much as possible to increase her contributory part to
fifteen percent(15%), while the employee should contribute five (5%) only,
reason been that employees should be assisted in the provision of individual
socio-economic needs while in active services.
ii. Various
levels of government should be mandated to keep a fixed percentage of their
revenue with the Central Bank of Nigeria (CBN) to carter for pension need of
their workers as a way of securing the future of the retirees.
iii. Any
pension fund administrator, custodian that is found uncomfortable or dubious in
his transactions should be blacklisted instantly and pension fund records and
funds in his keeping be retrieved and transferred to another custodian or
administrator.
iv.
Government should mandate all the PFAs to pay interest rates according to all
the customers.
CHAPTER ONE
1.0 INTRODUCTION
1.1 BACKGROUND TO THE STUDY
Prior to the enactment of the
Pension Reform Act 2004, pension scheme in Nigeria had been bedeviled by many
problems. This scenario necessitated the introduction of a new regime in
Nigeria by the administration of President Olusegun Obasanjo. The pension
system, unless specially adopted to meet the hardship of time, results in
hardship to the family of a white or blue collar worker who dies prematurely in
service, or on the verge of retirement or before enjoying the pension benefits
for any appreciable period, [Abah, 1999]. However, pension can be classified as
contributory and non-contributory pensions. A pension scheme is said to be
contributory when both the government and the employee contribute [not
necessarily equally] towards its payment. It is non-contributory if the whole
amount for its payment is funded by the government or the employer only,
(Chukwuemeka, 2008). Factually, the emergency of pension scheme allowed workers
to retire and the changing attitudes made it socially acceptable to do so.
The country operated Defined
Benefit Scheme (gratuity and pension) between January 1, 1946 and June 2004.
Nigeria in 1951, introduced pension benefits into the public sector with effect
from 1946, the idea brought about a major attraction for employment in the
public service. Nevertheless, the pension Act 102 of 1979 was the main
legislation guiding the entire public service. To qualify for pension then, the
officer involved must have served for a minimum of 15 years and gratuity period
was a minimum of 10 years of service. By 1992, it was reformed to minimum of 10
years for pension and 5 years for gratuity. One notable fact during the period
was the pension scheme success recorded by the private sector. Most schemes in
the public sector were insured schemes defined by contributions of employees
and employers. It provided large sum of retirement benefits or earlier
withdrawal. Pension fund managers, portfolio managers, bankers were relevant in
pension fund administration in the public sector. Again, decree 77 of 1993
established the Nigeria Social Insurance Trust Fund (NSITF) to replace the old
National Pension Fund (NPF) managed by the Federal Government for private
sector. Nonetheless, under this scheme, there were poor administration,
inadequate delivery system,
and lack of adequate records of movement from one employment to the
other. Again, the Pension Reform Act was enacted on the 25th June, 2004 and came into effect on 1st
July 2004. The Reform established a Defined Contributory (DC) scheme against
the former Defined Benefit (DB).
Dike,
(2006) stated that, ‘the enactment of the new pension Act 2004 signed into law by President Olusegun Obasanjo
on 30th June, 2004 has opened a new vista in the management of
pension fund. The present pension scheme regulated by the Pension Commission is
public and private sectors driven with government only playing its part by
contributing its quota to the relevant pension managers for private and public
servants.’
In
line with the background information is the issue of pension crisis before....
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