CHAPTER ONE
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.
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