The Role Of Contributory Pension Scheme In The Economic Development Of Nigeria

THE ROLE OF CONTRIBUTORY PENSION SCHEME IN THE ECONOMIC DEVELOPMENT OF NIGERIA

ABSTRACT

 

In this research work titled the role of contributory pension scheme in the economic development of Nigeria. The researcher examined the impact of contributory pension scheme in the economic growth of Nigeria. evaluated the contribution of the scheme  to the welfare of pensioners in Nigeria. The information for the study was collected using primary and secondary methods of data collection. For a primary data collection, while existing literature relevant to the topic was consulted for the secondary data. The research used chi-square statistical model to analyze the data. The researcher found out that Contributory pension scheme has significant impact on the economic growth of Nigeria. Contributory pension scheme contributes to the welfare of pensioners in Nigeria. Based on the findings the researcher recommend that Government and the National Pension Commission must ensure effective monitoring, supervision and enforcement of the provisions of the Pension Reform Act, 2004 that introduced the new contributory pension scheme in Nigeria. Firms and other organizations must ensure effective implementation, compliance and application of the elements of the new contributory pension scheme that will enhance employee retirement benefits.

 

 

 

 

TABLE OF CONTENTS

Title page                                                                                        ii

Approval Page                                                                         iii

Dedication                                                                               iv

Acknowledgement                                                                  v

Abstract                                                                                  vi

Table of Contents                                                                    vii

CHAPTER ONE

INTRODUCTION

1.1      Background of the Study                                               1

1.2      Statement of the Problem                                              3

1.3      Objective of the Study                                                    4

1.4      Research Question                                                         4

1.5      Research Hypothesis                                                      5

1.6      Significance of the Study                                                6

1.7      Scope and Limitations of the Study                               8

1.8      Definition of Operational  Terms                                    10

References                                                                  12

CHAPTER TWO

REVIEW OF RELATED LITERATURES

2.1      An Overview                                                                    13

2.2 Historical Development of Contributory Pension Scheme in Nigeria                                                                              14

2.3 The development of Pension administration in Nigeria   18

2.4 An Assessment of the Impact of Contributory Pension Scheme to Nigerian Economic Development                           20

2.5 The role of Contributory Pension Scheme in Nigeria       28

2.6 The Regulatory Bodies  and their role in Contributory pension scheme                                                                          29

2.7 Evaluation of the Application of the Contributory Pension Scheme On Employee Retirement Benefits in Nigeria              37

2.8 The Problems of Contributory Pension Scheme               42

2.9 Elements of the New Contributory Pension Scheme       45

References                                                                              47

 

 

CHAPTER THREE

RESEARCH METHODOLOGY AND DESIGN

3.1      An Overview                                                                    50

3.2      Source of Data                                                                50

3.2.1        Primary data                                                               51

3.2.2        Secondary data                                                           51

3.3      Population of the Study                                                  52

3.4      Sample size and Sampling Techniques                          53

3.5      Instrument used in determining the sample size         55

CHAPTER FOUR

DATA PRESENTATION ANALYSIS, DISCUSSION OF FINDING

4.1      An overview                                                                     57

4.2      Data presentation                                                          58

4.3      Data Analysis                                                                 60

4.4      Testing of Hypothesis                                                     70

4.5      Discussion of Findings                                                    77

CHAPTER FIVE

SUMMARY OF FINDINGS, CONCLUSION AND RECOMMENDATIONS.

5.1      Summary of Findings                                                     79

5.2      Conclusions                                                                    80

5.3      Recommendations                                                          81

5.4      Suggestions for Further Studies                                    83

Bibliography                                                                   84

Appendixes                                                                     87

Sample questionnaire                                                    88

 

 

 

CHAPTER ONE

1.1 Background of the Study

Nigeria being a former colony of Britain, it’s been argued, received a pension tradition into her public sector that is entirely modeled after the British structure. Nigeria pension’s scheme had started in 1951 when the then colonial British administration established a scheme through an instrument called Pension Ordinance. It, however, had a retroactive effective from 1946 and applied only to Untied Kingdom officials posted to Nigeria. The law allowed the Governor General to grant pensions and gratuities in accordance with the regulations, which were reviewed from time to time with the approval of the Secretary of State for Colonial Affairs in the United Kingdom government. Vesting period was fixed at 10 years of service. The whole of the Ordinance Acts and Decree is capped up in the Decree No. 102 of 1979, which took effect from April 1, 1974. It consolidated all enactments on pensions and in corporate pension and gratuities seals devised for public officers by the Udoji Public Service Review Concision in 1974. In the same way, Pension Act No. 103 of 1979 like its counterpart Decree No.

102, of 1979, on the other hand, dealt with pension benefits, liabilities and seals devised for the agreed forces.

The main features of these pension schemes include that civil servants bore no direct responsibility, by way of payroll tax, for the provision of pension; instead pension benefits were paid through budgetary allocations to be kept in the Consolidated Revenue Fund. Thus, in most cases, the amount released usually fell short of the actual appropriation for pension payment.

 

1.2 Statement of problem

The following problems led to the formation of this research work;

1.  Previous studies has shown that due to poor management and dubious characters of many Nigerians, contributory pension scheme has not impacted significantly to the economic growth of Nigeria.

2.  In the past decades, contributory pension scheme in Nigeria has not been taking care of the welfare of the pensioners.

3.  Poor management of Nigerian pension scheme hampers the relationship between contributory pension scheme and the development of Nigerian pension scheme.

 

 

1.3 Objective of the study

The aim of this project work is to examine the role of contributory pension scheme in the economic development of Nigeria. The general objectives of this research work includes the following;

1.  To examine the impact of contributory pension scheme in the economic growth of Nigeria.

2.  To evaluate the contribution of the scheme (contributory pension scheme) to the welfare of pensioners in Nigeria.

3.  To examine the relationship between contributory pension scheme and the development of Nigerian pension scheme.

1.4 Research questions

1.  What are the impacts of contributory pension scheme in the economic growth of Nigeria?

2.  To what extent do contributory pension scheme contribute to the welfare of pensioners in Nigeria.

3.  What are the relationships between contributory pension scheme and the development of Nigerian pension scheme?

1.5 Research Hypotheses

Ho: Contributory pension scheme do not have any impact on the economic growth of Nigeria.

H1: Contributory pension scheme has significant impact on the economic growth of Nigeria.

Ho: Contributory pension scheme do not contribute to the welfare of pensioners in Nigeria.

Ho: Contributory pension scheme contributes to the welfare of pensioners in Nigeria.

Ho: There is no relationship between contributory pension scheme and the development of Nigerian pension scheme.

H1: There is significant relationship between contributory pension scheme and the development of Nigerian pension scheme.

1.6     Significance of the Study

This research work will be of immense help to the researcher:

To know more on the role of contributory pension scheme in the economic development of Nigeria.

        It will also be of great help to the stake holders as it will enrich their knowledge on the role of contributory pension scheme in the country.

The study will be of great important to pensioners in Nigerian as it enlighten them on the role of contribution pension scheme on their welfare. 

        This will equally help the insurance companies and financial institutions in Nigeria because when they abide by recommendations provided by the researcher it will help then in time of financial crisis.

        This study will be of a great importance to the country Nigeria as it will help the policy makers to promulgate laws that will guide the activities of Nigerian contributory pension scheme for the growth and development of the country.

 

 

 

 

1.7 Scope and Limitation of the Study

Scope of the Study

        This research project focuses on the role of contributory pension scheme in the economic development of Nigeria. However, The researcher experienced the following limitations;

1.7 Scope and Limitation

This research project focuses on the role of contributory pension scheme in the economic development of Nigeria. However the researcher experienced the following limitation

1. FINANCE: The researcher lacked enough funds to carryout this project, thereby leading to a slight delay in the successful completion of this research work.

2.TIME: There was not enough time on the part of the researcher regarding the time needed to attend lectures, do various assignments, prepare for degree examinations and also carryout this research project.

3. DIFFICULTY IN GATHERING MATERIALS: The researcher had difficulty in gathering the materials which made the process of carrying out this research project a bit difficult.

4. ATTITUDE OF THE RESPONDENTS: The respondent were not really cooperative to the researcher due to fear of leaking their secret to competitors

5. UNAVAILABILITY OF THE RESPONDENTS: Most of the respondents were not always available each time the researcher visits to gather information   this delayed the successful completion of this research work.

 

 

1.8 Definition of Operational Terms

1. Pension fund: means any society fund contract or scheme, the assets of which are help under irrevocable trust and any scheme established by law in Nigeria else where but main objective is of which are in the opinion of the joint tax board (JTB)the provision and annuities for an individuals of his dependents after his death or his any group of class of some individual.

2. SCHEME: Means a systematic plan for the pension variation of benefit under a legally enforceable  agreements.

3. RETIREMENT BENEFIT SCHEME: Means a pure pension and providing fund and gratuity scheme under which a cash sum of payable upon the exist of an employee from employment having define condition.

4. PUBLIC SERVANTS: Means federal and state civil servants members of the armed force, employees of local Government Authorities, federal and state Government parastatals.

5. CONTRIBUTION PENSION SCHEME: Means an employee contributes a percentage of his salary and the employees salary towards the retirement benefit of the employee.