BANKER’S ROLE IN PENSION FUND MANAGEMENT IN NIGERIA

CHAPTER ONE

INTRODUCTION

1.1 BACKGROUND OF THE STUDY

In the old Nigeria pension system, only public sector employees were covered, by way of statutory compulsion. The first public sector pension scheme in Nigeria was the pension ordinance of 1951, with retroactive effect from January 1, 1946. The law allowed the governor general to grant pens ions 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 UK government. Vesting period was fixed at 10 years of service. Though pension and gratuities were provided for in the legislation, they were not a right as they could be reduced or withhold altogether, if it was established to the satisfaction of the governor – general that the officers was found guilty of negligence, irregularity or misconduct. The pension scheme in the public sector has undergone various developmental stages after the first pension ordinance. For example, the civil service pension scheme was established by the basic pension decree 102 of 1979; the local government pension scheme was established by military fiat in 1977 and the armed force pension scheme created through decree 103 of 1979 with retroactive effect from April 1974. There were also the pension rights of judges’ decree no5 of 1985 as amended by amendment decree no51 of 1988, 29 and 62 of 1991. The police and other agencies pension scheme decree no 75 of 1993 which took retroactive effect from 1990 represented their landmark development in the history of the Nigeria pension system. Governmental parastatal and agencies in Nigeria directly funded by the treasury had a unified pension scheme that was virtually managed by insurance companies.

The first private sector pension scheme in Nigeria was set up for the employees of the Nigerian breweries in 1954, which was followed by united African company (UAC) in 1957. National provident fund (NPF) was the first formal pension scheme in Nigeria established in 1961.The first pension reform Act no 102 of 1979 was introduced before the Nigeria second Republic by the