CHAPTER ONE
INTRODUCTION
1.1 Background of the Study …………………………………………. 1
1.2 Statement of the Problem ……………………………………….. 3
1.3 Objective of the Study …………………………………………….. 5
1.4 Research Question ………………………………………………… 6
1.5 Research Hypothesis …………………………………………….. 7
1.6 Significance of the Study ………………………………………… 8
1.7 Scope and Limitation of the Study …………………………… 9
1.8 Definition of Term ………………………………………………… 10
CHAPTER
TWO
LITERATURE
REVIEW
2.1 Concepts and Meaning of Pension Fund ………………. 12
2.2Types
of Pension Fund Scheme ………………………………. 14
2.3Institutional
Framework …………………………………………….. 17
2.4Objective
of Pension Reform Act 2004 ……………………… 19
2.5The Problems and Challenges of Pension Fund in Nigeria ……….. 21
2.6Contribution
of the Pension Fund Scheme ………………… 24
2.7Benefits
of Pension Fund Scheme …………………………… 26
2.8Factors
Affecting Pension Fund in Nigeria ………………… 30
2.9The Role of Financial Institution in Pension Management …………. 33
2.10 Opportunities and Challenges for Financial Institutions on Pension Industry …………………………….. 36
2.11 Challenges and Prospect in management of Pension Fund in Nigeria ……………………………………….. 41
2.12 Shortcoming in the Implementation of the New Pension Reform Act …………………………. 47
2.13 Funded Pensions in Nigeria Political Economy
2.14Overview of Pension
Fund Act Investment and
Risk Management …………………………………………………. 48
2.15Provision
Relating to Risk Management ………………….. 52
2.16Pension
Risk Management Operation Process ……….. 54
2.17 Implications of the New Funded Pension Scheme in Nigeria ……….. 58
CHAPTER
THREE
RESEARCH
METHODOLOGY
3.1Research
Design ……………………………………………………… 64
3.2 Sources of Data ……………………………………………………. 65
3.3 Area of the Study ………………………………………………….. 65
3.4 Population of the Study …………………………………………. 66
3.5 Sample Size Determination ………………………………….. 66
3.6Method
of Data Collection ………………………………………… 67
3.7Method
of Data Analysis …………………………………………… 68
3.8Validation
and Reliability of the Instrument ………………… 69
CHAPTER
FOUR
PRESENTATION
ANALYSIS OF DATA
4.1 Presentation of Data ……………………………………………… 70
4.2 Hypothesis Testing ……………………………………………….. 89
4.3 Data Analysis ……………………………………………………….. 99
CHAPTER
FIVE
SUMMARY OF FINDINGS, CONCLUSION
AND RECOMMENDATIONS
5.1 Summary of Findings ………………………………………….. 103
5.2Conclusion
……………………………………………………………… 104
5.3 Recommendation ……………………………………………….. 105
5.4 Suggestion for Further Studies ……………………………. 106
BIBLIOGRAPHY
…………………………………………………. 108
APPENDIX………………………………………………………….
112
ABSTRACT
This project work is focused on management of
Pension Fund in Nigeria: challenges and Prospects The project is aimed at
examining the challenges faced by management of pension fund in Nigeria and
achievement or prospects recorded so far. The writer in reviewing literature of
this work employed a historical method. In chapter three the researcher made
use of survey research plan in which questionnaires were split into section,
stratified random sampling were equally applied and statistical data were
extracted and used. Furthermore, the writer formulated hypothesis in line with
the problems and objectives of the study. However, product moment coefficient
of correlation were used to test the hypothesis in which the following result
emerged. The amount of pension fund contribution has a high positive
relationship with asset investment portfolio and prospect on amount of
contribution were recorded. The FGN bond capital market has a high positive
relation with asset investment of pension fund which created prospect to
pension fund investment system in Nigeria. Biometric system assists to dictate
fraud and encourage proper investment of pension fund in Nigeria. Data
collected were analysed and presented with tables and percentages. In view of
the findings made, the following recommendation accrued from the result of the
research work: Ethics and moral standard should be built. Prompt and regular
payment of pension should be adopted, proper investment and expansion of asset
investment portfolio should be encouraged. Adequate training should be given to
management on how to make effective and efficient use of biometric system.
CHAPTER
ONE
INTRODUCTION
1.1 BACKGROUND
OF THE STUDY
The
management of Pension Fund in Nigeria is as old as Nigeria itself. Pension fund
was introduced by the colonial masters to provide income and security for old
age British citizens working in Nigeria upon retirement as a post-retirement
benefit to employees. In the view of Adesina (2006:7), Nigeria Legislative
instrument on pension matters was the pension ordinance of 1951 which had
retrospective effect from 1st January, 1946. In 1961 National provident from
(NPF) scheme was established with the legislation to address pension matters n
private organizations. Eighteen years later Pension Fund Act No. 102 with Armed
Forces Pension Act No. 103 came up the same year in 1979. In 1987 police and
other Government Agencies Pension was enacted under Pension Act No. 75. The
Local Government Pension edict followed suit in 1987. By 1993 the National
Social Insurance Trust Fund (NSITF) was established by degree No. 73 to replace
the defunct NPF. In 1994 employees in private sector were equally accommodated
by the scheme for lost of
employment income at old age, invalidity or death.
Due to
poor funding, inadequate budget allocation huge arrears of outstanding
pensions, improper regulation and supervision, management of pension fund in
Nigeria decided to put a new Pension Reform Act in 2004. Though prior to the
reform according to Balogun (2006:18), public organization operated a defined
benefit (pay-as-you-go) scheme final entitlement were based on length of
service and terminal emoluments. The defined benefit (DB) scheme were funded by
Pension Department of the office of the Head of Service of the Federation.
The
Pension Reform Act 2004 is the most recent legislation of the Federal
Government at reforming the pension fund system for both private and public
sectors. Atedo N.A. (2006:9) sees, “The Act” as a compulsory
Contributory Pension Scheme (CPS); has been established for all categories of
workers in the Federal Capital Territory Federal Public Service and in the
private sector. The Pension Fund Scheme became a challenge to the government as
it could no longer cope with payments of pensions and gratuities to retiring
work force. This is apparently due to the fact that there was no
plan put in place to forestall the challenges of poor
funding caused by inadequate budgetary allocation. The administration and
management of pension fund was also generally characterized by weak regulatory
framework inefficient and non transparent (Nkanga, 2005:16). Meanwhile,
according to Ahmed M. (2006:2), Board of trustees of parastatal were free to
decide on whether to maintain an insured scheme or self administered
arrangement.
Moreover,
prospect has been achieved in the area of amount contributed, investment of the
fund and use of biometric to gather accurate data and reduce fraud.
Based
on the foregoing the researcher intend to study management of pension fund in
Nigeria, challenges prospects.
1.2 STATEMENT
OF THE PROBLEM
MANAGEMENT OF PENSION FUND IN NIGERIA:CHALLENGES AND PROSPECTS
