PENSION AND GRATUITY ADMINISTRATION IN NIGERIA

Abstract

The research study titled ‘’Pension and Gratuity Administration in Nigeria Problems and solution’’ A case study of Kogi State Pension Board, Lokoja, shows the problems of poor and non-implementation of pension and retirement benefits payment for several years and another problem of delay in payment of pension and gratuity. This research work is written with the objectives to evaluate the problems and to improve the administration of pension and gratuity. Data of this study were collected from primary and secondary sources. The efficiency of the field work from the fourty respondents were validated using statistical instruments known as simple percentage and chi-square method respectively. Findings shows that pension and gratuity can be effectively administered in Kogi State and also indicates that there are problems encountered in the administration of pension and gratuity and that benefits are not being paid to the beneficiaries as at when due. Recommendations were also made that there should be improvement in the administration of pension and gratuity, the staff of the pension board should be well trained to ensure adequate accountability and all retirement benefits should be paid to beneficiaries as at when due.

 CHAPTER ONE

INTRODUCTION

• Background of the study

The importance of pension and gratuity in Nigeria cannot be over emphasized. An evaluation of administration of pension and gratuity generally indicates some militating factor against prompt payment of retirees. Every person employed for several numbers of years would one time be retired of his/her post either voluntarily and be given a name, pensioner or retirees. At that point in time he/she starts collecting meager amount monthly called pension. One is said to be retired if one is not working full time and derives at least the largest portion of his/her financial support from pension payment and this continue until the retiree (ceases to live again (die). However, the attitude of the beneficiaries over long period of time have called researchers attention to point out problem associated with the system of payment and at the same time suggest valuable solutions to the improvement of the system. According to the pensions decree No 102 of 1979 section 4 (1) the statutory age of retirement of public servants is 60 years while judiciary officials retire at the age of 65. Consequently, the civil service re-organization decree 43 of 1988 had add the modification that officers should now retire from service on attaining the age of 60 years or 35 years of services which ever that come earlier. In Nigeria, where the government is the major employer of labour, its policies are adopted by independent industrial and commercial organizations. The impact of pensions and gratuity is almost universal even if an employee received huge sum of money while on active working service yet income received after retirement will decrease depending on the level he/she retired. And this is done based on the schedule for the computation of gratuity and pensions. Pension and gratuity scheme in transition economies were used to augment and alleviate the effect of output loss on certain strata of the population and raised income inequality that pervaded the economies. However, the attitude of the beneficiaries over long period of time have called researchers attention to point out problem associated with the system of payment and at the same time suggest valuable solutions to the improvement of the system. In Nigeria, government has claimed to be using pension and gratuity system to ameliorate and augment the suffering of her retired public workers. Pensions and gratuity as a reform of special security against old age, poverty and other uncertainties arouses great interest virtually every where both in developed and developing countries in recent times, pension programmes specially those that are publicity financed and administered have become issue of concern to economist, policy makers and public at large. This is not only one because such programmes are central to the well-being of the pensioners or any elderly, but largely because majority of the pension and gratuity programmes are not balanced (i.e. they are not financially stable) and as such, they are run at deficits, thus making the present values of their future liabilities to be largely enormous (Chard and Jaeges). At this end, an overview of what pension and gratuity programmes/scheme entails is needed for a general understanding of pensions and gratuity scheme as a reform of social security services.