Assessment of Pension Administration in Nigeria: Challenges and Prospects

Abstract

The management of pension scheme in Nigeria has generated a lot of attention due to its importance as an assurance for future financial security of Pensioners, and the fact that there is increase demographic shift in the working population and the number of retirees. Despite the fact that a lot of literature has been written on the subject, the disposition of the institutional and legal framework for the management of pension in Nigeria has produced unsatisfactory result, due to its perceived inefficiency and ineffectiveness. This necessitated the topic of this study-Assessment of Pension Administration in Nigeria: Challenges and Prospects. The objective of the study was to assess the administration of the pension schemes being operated in Nigeria against the background of the institutional and legal frameworks for the management. This was done with the view to determining their adequacy or otherwise. It was also to consider the challenges and constraints and proffer recommendations as ways of avoiding the inherent pitfalls in future reforms. Methodology used was in the form of field survey, through structured questionnaire was conducted from among a cross section of stakeholders, including pensioners. This was done, in order to collate the perception of all the stakeholders in pension and its administration. Secondary materials sourced from the Internet and other sources were also utilized to complement survey findings analyzed. The findings made, further reinforced the importance of pension as a form of social security and assurance for the future if properly managed. Specific findings indicated that the management and administration of pension in Nigeria has been abysmal. It revealed that while there was nothing wrong with the legal frameworks, the fact of fragmentation posed administrative difficulties in that officials had to contend with interpreting too many laws. Findings also revealed that the incidences of paucity of fund, lack of consistent and adequate budgetary provisions, corruption of officials, poor pensioners' record and data were the negative products of the maladministration that was the hallmark of pension administration in Nigeria. As a result of this, the study noted the existence of the Pension Reform Act enacted in 2004 with provisions to cater for the anomalies of the past pension administration. In order to ensure that the pitfalls of the past are not repeated in the management of pension in Nigeria and based on findings, the study made a number of recommendations which included, the need for government to have the political will to implement the pension law to the letter, ensure transparency in the management of pension, eradicate corrupt practices, improve the record management system of the pensioners through the establishment of a national data bank, regular and consistent release and remittance of funds and deductions by employers. A number of implementation strategies were also suggested, with opportunity for further research on the Pension Reform Act 2004.