IMPACT OF RETIREMENT BENEFITS ON THE LIVING CONDITION OF RETIREES IN ALAGBOOLE AREA OF OGUN STATE NIGERIA

CHAPTER ONE

INTRODUCTION

1.1   BACKGROUND OF THE STUDY

One of the reasons why the old pension scheme was jettisoned was because of lack of fund andlate payment of pensioners’ benefits. These and other palpable reasons pauperized and reducedReview of Public Administration and Management Vol. 3, No. 6, December 2014188the retirees to live in misery to the extent that some people referred to them as “dead woods”.

However, the introduction of the new pension scheme rekindled their hopes and the hopes ofwould-be-retirees. Significantly, the turn of events in recent days as regards late payment ornon-payment of pension is beginning to dampen the hopes of these people the disparity between the old pension and the new pension.

According to them those in the old pension received about 80 percent of their money while thosein the new pension received less than 30 percent (FRCN, News, 2015). More importantly, thePension Reform Act of 2004, section 4c stipulates that:“Retirees will have not less than 50% oftheir last pay as monthly pension as at the date of retirement”.Unfortunately, none of the retirees enjoyed this amount since the inception of the Act till dateKajusola, 2015).

Furthermore, the old pension scheme was characterized with late payment,and the new scheme was meant to ensure that retirees received their pension as at when due.However, most retirees do not get their entitlements as at when due. Some are owed for up to 10months due to some administrative bottle necks either from the Pension Commission or thePension Fund Administrators.Derowoju, (2012) noted however that many retirees’ benefits aredelayed because some of them do not inform their Pension Fund Managers before retirement;this results to late clearance from the employers and incomplete documentation with the PFAs.

Other factors for the delay of payment include; failure to notify. Again, the investment ofRetirees’ contributions take some time to produce returns and this often causes some delays inpaying the pensioners their benefits. As Adedeji (2013) observed that returns can be inverselycorrelated so when one is up the other is down, some assets are long term in nature and may taketime to generate returns, thus the delay in these returns, delay the payment of pension to retirees.Furthermore, the contributory pension scheme is still haunted by the old fears of traced andcorruption that encumbered the old national pension fund. Already there are complications inthe form of sharp practices among the staff of some unnamed PFAs have manifested in the newpension scheme (Ohai et al, 2013); and these complications have resulted in non-payment ofsome pensioners in the new scheme their complete retirement package (Kajusola, 2015).Review of Public Administration and Management Vol. 3, No. 6, December 2014. The research  intends to investigate the impact of retirement benefit  on the living condition of retirees in Alagboole Area Of Ogun State.

1. 1. STATEMENT OF THE PROBLEM

The problem confronting this research is to investigate the impact of retirement benefit on the living condition of retirees in Alagboole Area Of Ogun State .The re-occurring nature of policy changes on retirement benefit seems rather difficult to understand and does not conform with current economic realities facing retirees.

1. 1. OBJECTIVE OF THE RESEARCH
2. To appraise the nature of retirement benefit in Nigeria?
3. To determine the impact of retirement benefit on the living condition of retirees in Alagboole Area Of Ogun State.
   1. RESEARCH QUESTION

1. What is the nature of retirement benefit in Nigeria?
2. What is the impact of retirement benefit on the living condition of retirees in Alagboole Area Of Ogun State?
   1. SIGNIFICANCE OF THE STUDY

The study shall analyze the nature and impact of retirement benefit on current economic realities facing retirees with a view to providing recommendations on retirement policy formulation and implementation.

1. 1. STATEMENT OF HYPOTHESIS

        H0    The impact of retirement benefit on the living condition of              retirees in Alagboole Area Of Ogun State is low.

        H1     The impact of retirement benefit on the living condition                         of retirees in Alagboole Area Of Ogun State is high.

1.7     SCOPE OF THE STUDY

The research is focused on appraising the impact of retirement benefit on the living condition of retirees in Alagboole Area Of Ogun State

1. 1. DEFINITION OF TERMS

PENSION: Pension is the periodic payment granted to an employee for services rendered,based on contractual legal enforceable agreement, paid by an employer at the agree time oftermination of appointment (Iwu, 2007).

RETIREMENT BENEFIT: Retirement benefits  aid the retirees to sustain themselves when they are out of job or too old to do any other thing. This accounts for the importance government everywhere attaches to retirement benefits; at least to cater for the welfare of their retirees, who had spent the productive part of their life working for the growth and development of the country.

One of the retirement benefits well known the world over is pension. It is the amount paid bygovernment or company to an employee after working for some specific period of time,considered too old or ill to work or have reached the statutory age of retirement (Adam, 2005).

As a scheme, Pension is the periodic payment granted to an employee for services rendered,based on contractual legal enforceable agreement, paid by an employer at the agree time oftermination of appointment (Iwu, 2007).