DEVELOPING EFFECTIVE STRATEGY FOR PENSION ADMINISTRATION IN THE NIGERIAN PUBLIC SECTOR (A STUDY OF PENSION COMMISSION RIVERS STATE, NIGERIA)

  1.0 INTRODUCTION

        1.1 BACKGROUND OF THE STUDY


      The  greatest  challenge  to  government  worldwide  remains the  issue

relating to pension fund management. A financial analyst called Alexandra

Forbes argues


                        “Pension Management, world  over, has  become          

                        an  increasingly  great  concern  to  most government      

                        and countries of the world”.

And  coming  to  Nigeria, the  country  was  guided  by  a  number  of  pension

regimes prior to the promulgation of the pension Act 2004, pension schemes

in  Nigeria  had  been  bedeviled  with  many  pitfalls.  The  public  service

operated  an  unfounded  defined  benefit  schemes  and  the  payment  of

retirement benefits were budgeted annually. The annual budgetary allocation

for  pension  was  often  one  of the  most  vulnerable  items  in  budget

implementation in even where budgetary provisions were made, inadequate

and untimely release of fund resulted in delays and accumulation of arrears

of  payment  of  pension  rights.  It  is  then  obvious  that,  the  defined  benefit

scheme could not be sustained.


     In  the  private  sector  on  the  other  hand,  many  employees  were  not

covered  by  the  pension  scheme  put  in  place  by  their  employers and  many

other  schemes  were  not  funded.  Besides,  where  the  schemes  were  funded,

the management of the pension funds was full of malpractices between the

fund management and the trustees of the pension board.

                                          
 
 
 
 
 
 

 

 The scenario agitated a re-think of pension administration in Nigeria by the

then  President  Olusegun  Obasanjo`s  administration,  accordingly,  the

administration initiated a pension reform in order to address, eliminate and

eradicate the problems associated with pension reform act 2004.


      Good  times  come and  go,  retirement  is  definite, and  the question

therefore is  “Can people  still  live  a  good  life  after  retirement”?  The  non-

implementation of budgeted income  to  pensioners,  a non-effective  strategy

for pension  administration  is  seemingly  a  growing  problem in  Nigerian

economy. Some retirees are forced to continue to work throughout their life

not out of choice but for lack of means of sustenance at old age. They are

therefore forced to go in search of menial jobs to make ends meet, since they

are not even sure of getting their pensions.


     Apart  from  the stress  associated  with  working at  old  age,  how

relevant  can  an  individual  be at  age 70 or  80  in  the  face  of  ever  changing

knowledge brought about by advancement in technology? Besides, of what

use  is  life  without  rest  at  old  age?  Even  where  one  is  willing  and  able  to

continue  working,  the  opportunity  for  the  elderly  to  continue  working  is

declining. However, it is against this backgrounds that the researcher wishes

to develop effective strategy for pension administration in the Nigeria public

sector.


1.2 STATEMENT OF THE PROBLEM


      First comes the layoffs then pay cuts finally a delay in the payments

  of benefits due to poor policy formulation and implementation, incorrect

  record keeping and inadequate accountability of public funds. The non-

    implementation of budgeted income to pensioners, delay in the payment

                                          
 
 
 
 
 
 

 

  and  denial  of  pension  accrued  to  pensioners  leading  to pensioners

  protesting over non-payment of pensions and non-compliance with ethics

  of public financial management.


1.3 OBJECTIVES OF THE STUDY


The aims and objectives of the study are to ;-


1. To proffer solutions to the problem that brings about a non-effective and

efficient management in pension administration.


 2.  To  identify  measures  and  steps  dealing  with  the  issues  of  poor

implementation of budgeted income to pensioners.


 3. To examine the quality of personnel in various pension boards.


 4.  To  ascertain  whether  the  administration  of  pension  funds  are  done

judiciously.


1.4 TEST OF HYPOTHESIS 


      For  the  purpose  of  the  study,  the  following  hypothesis were  put

forward;-


  1. Ho : Non-effective and efficient management cannot be compared to

    poor pension administration. 

  2. Hi : Non-effective and efficient management can be compared to poor

      pension administration.


  Ho  :  The  budgeted  income  to  pension  are  not  implemented  as  at  when

  due.


  Hi : The budgeted income are implemented as at when due

                                          
 
 
 
 
 
 

 

1.5 RESEARCH QUESTIONS


1. Can people still live a good life after retirement?


2. Why poor policy formation and implementation of pension benefits?


 3.  Does  incorrect  record  keeping  and  inadequate  accountability  of  public

funds case delay pension benefits?


4.  Does non-implementation  of  budgeted  income  to  pensioner  leading  to

pensioners protesting over non-payment of pension?


 5. Does non-compliance with ethics of public financial management cause

problem of pension?


1.6 SIGNIFICANCE OF THE STUDY


     Holistic  change  is required  in  order  to  create  a  framework  that  will

enable  consumers  have  a  greater  financial  security  at  old  age.  This  study

signifies  a  whole lot; it  is  intended  to  find  out  the  intrinsic  and  extrinsic

cause of poor pension administration. The findings will hopefully:


  1. Assist the researcher that although simple in nature will

  a. Effect radical improvements in the administration of pension funds

  b. Deliver significant benefits to all consumers when they retire.

 

  2. Serve as a guide to public official in charge of this administration of

      pension funds to pensioners.

  3. Assist  the  governments  in  setting  priorities  according  to  their  social

      fiscal policies.