GET THE COMPLETE PROJECT

1028 Users found this project useful

AN ASSESSMENT OF RETIREMENT BENEFITS ADMINISTRATION IN NIGERIA

ABSTRACT

This research presents the results of the assessment of retirement benefit administration in Lagos state. The population for the study consists of 100 pensioner which were randomly selected, Data were gathered using a self -constructed questionnaire and the result gotten was analyzed using the simple percentage method.  The validity and reliability of instrument were ascertained. Data analyzed from the research shows Lagos state has a good administration for the claiming of retirement benefit i.e. that retiree in Lagos state are enjoying their retirement life better that those in other state, therefore the study recommends that government needs to enlighten the public on the importance of planning towards retirement and the contributory pension scheme, this will go a long way to reduce the stress of having to cope with life after retirement.

CHAPTER ONE

1.0                                             INTRODUCTION

1.1     Background of the Study

Retirement is a phase of life that every employee must reach whether prepared for or not. It is the point in time when an employee chooses to leave his or her employment permanently (which could be voluntary or involuntary), and generally coincides with the employee’s eligibility to collect retirement resources ranging from social security to company pensions, etc. It is an inevitable stage in someone’s life be it in the private or public service, it is a period in time whereby one’s effort in an organization and role as a paid worker ceases, (Agoro, 2009; Ahmed, 2007; Bassey & Asinya, 2008).

This can be as a result of ill health, age or statutorily completing the number of years. With the reform of the civil service decree No. 43 of 1988, retirement age has been put at 60 years or 35 years in service. Whichever comes first, there arises the need to carefully and adequately manage these categories of workers who had given most of their life, time and efforts to the actualization of organizational growth and its development. Thus, it presents a worse situation when the retiree is not adequately prepared to face this ultimate phase of life. This among others have necessitated the need for a pension administration in order to cater for future responsibilities of these categories of workers and to enable them have a similar and reasonable standard of living prior to what obtains while they were in active service. In most developing countries with Nigeria particularly, government restrict working age of public civil servants to prevent an ageing labor force and allowing entrants of young able-bodied labour for increasing efficiency and productivity, (Federal Republic of Nigeria Official Gazette, 2004). This is important because as an employee becomes older, his Marginal Physical Productivity of Labour (MPPL) will decline, thus retaining such an employee in the service of the organization will lead to running an organization at a loss. Hence, why the statutory working age in the public service is fixed at sixty (60) years or thirty-five (35) years of unbroken active working service before retirement, but the Retirement Age Harmonization Act of 2012 stamps the retirement age of judicial officers and academic staff of tertiary institutions at 70 and 65years respectively because of the belief that “the older, the wiser” (Maji, 2014). During retirement, a retiree public officer usually receives certain benefits in the form of gratuity and pension. Gratuity is the sum total lump paid to a worker on existing from the service either through withdrawal or retirement, while pension is the sum of annuity paid periodically, usually monthly to a public servant who disengages from service after attaining a specified age limit usually 60 years or 35 years of active service, (Ezeani, 2001; Ebosele, 2001). In other words, gratuity and pension are post-employment benefits. These benefits are designed to prevent a sudden sharp drop in the financial capacity and living standard of the worker as would happen with the stoppage of his monthly salary and allowances after disengagement. The lump sum or gratuity he is paid is meant to enable the retiree finance any post-retirement endeavor of his choice while the pension replaces the monthly salary the retiree gets while he was still in active serve, (Babasola, 2000). In this way, the retiree having spent a substantial part of his productive life working to earn a living, can in his old age (that is, at retirement) sustain and maintain a standard of living comparable to what he was used to while in active service. It is based on this that most progressive government enact laws to back up their policies on employment, retirement and pension in both the public and private sectors of the economy. To Casey (2011) and Taiwo (2014), pensions as a form of social security against old-age poverty and other uncertainties have attracted great interest virtually everywhere in the world, both in developed, developing and under-developed countries. Pension programs, especially those that are publicly financed and administered, have become an issue of concern to economists, policymakers and the general public. This is not only because such programs are central to the well-being of pensioners and the elderly, but also because the majority of pension programs are not actuarially balanced (that is they are not financially stable) and as such, they are run at deficits, thus making the present values of their future liabilities to be enormous. In some countries, especially those that are economically advanced, pensions are usually extended to other categories of people apart from retirees, such as widows, orphans, disabled people (in the form of disability pensions), and the elderly or the aged.

1.2     Statement of the Problem

A major problem of the pension fund administration in Nigeria was the non-payment or delay in the payment of pension and gratuity by the Federal and State governments. For instance, the pension backlog was put at about N2.56 trillion as at December, 2005. In fact, pension fund administration became a thorny issue with millions of retired Nigerian workers living in abject poverty and they were often neglected and not properly cater for after retirement (Orifowomo, 2006). Sadly, retirees went through tough times and rigorous processes before they were eventually paid their pensions, gratuity and other retirement benefits. At one time the money to pay their benefits is not available; and at another time, the Pension Fund Administrators were not there to meet the retirees’ needs. Basically, the old scheme has been beset with a lot of challenges and problems. Besides the aforementioned; other problems were: demographic challenges and funding of outstanding pensions and gratuities, merging of service for the purpose of computing retirement benefits. These problems coupled with the administrative bottlenecks, bureaucracies, corrupt tendencies and inefficiencies of the civil service, and the economic downturn have resulted in erratic and the non-payment of terminal benefits as at when due (Orifowomo, 2006; Ezeala, 2007, Abade, 2004)

1.3     Objective of the Study

The main objective of the study is to assess the retirement benefit administration and the effect it has on retirees in Nigeria; specifically the study intends to;

1.     To find out the effect of retirement benefit on the socio economic lifestyle of retirees in Lagos state

2.     To investigate the problem associated with the retirement benefit administration in Lagos

3.     To proffer solution to the problems of retirement benefit collection in Lagos state

1.4     Research Questions

1.     What is the effect of retirement benefit on the socio economic lifestyle of retirees in Lagos state?

2.     What are the problem associated with the retirement benefit administration in Lagos state?

3.     What is the impact of retirement on the social status of retired civil servants

4.     What solution can be proffered to the problems of retirement benefit collection in Lagos state?

1.5     Significance of the study

The study could be of benefit to civil servants in Nigeria; it could inform them on the avoidable pitfalls of their predecessors. Besides, the knowledge from the study could trigger a more innovative, careful, and prudent lifestyle in civil servants while in service, in preparation for their post-retirement years. Furthermore, newly employed individuals both in the public and private sectors could garner information from the findings of the study on the actual mechanisms of the current Nigerian pension scheme. This could help them begin planning for retirement and old age early in their working years. The study could be an eye opener to government at all levels and those saddled with the task of employment, retirement and old age policy making in the country. A considerable number of Nigerians are government employees. This calls for better and informed policy making, well implemented to safeguard people in their old age. Since it is impossible not to have retirees and 8 old folks in society, planning correctly and adequately for their needs cannot be over-emphasized as part of plans towards sustainable development in the country. Thus, the findings from the study are capable of assisting lawmakers make policies that could address the plights of and positively impact the aged and retired individuals in Nigeria. Knowledge-based policy implementation especially in reforming the contributory pension scheme to be more proactive, is another crucial end the study could help achieve.

1.6     Scope of the Study

The study is limited to retired civil servants between the ages of 60 and 80, who had worked and are living in Lagos States. Retirees within this age bracket would have had tangible experiences of the transitional phase between work and retirement. Civil servants who retired in the last 6 months were excluded from the study. This is because they might not have had sufficient transitional experiences required to provide adequate information required by the study. Participants could be federal, state or Local Government Areas retirees.

1.8     Limitation of the Study

The challenge of finance for the general research work will be a challenge during the course of study.  However, it is believed that these constraints will be worked on by making the best use of the available materials and spending more than the necessary time in the research work. Therefore, it is strongly believed that despite these constraint, its effect on this research report will be minimal, thus, making the objective and significance of the study achievable.

GET THE COMPLETE PROJECT