ABSTRACT
This
research work tends to examine the impact of pension reform on organizational
performance in the public sector with special reference to Lagos State Ministry
of Education.
Descriptive
design was implored for the research design. Also a simple random sampling
technique was used in the data selection. This technique was used to avoid
biasness in the selection of respondents.
A
sample of Fifty (50) was drawn from the population resulting to Fifty questionnaires
being administered to staff of Lagos State Ministry of Education.
The data gathered were tabulated
and presented in percentage. The two hypotheses formulated were analysis using
Chi-Square Analysis method. Conclusions were drawn from the result of the
analysis. Based on the analyasis, the result indicated that Direct contributory
(DC) of the pension reform act is practically existing in the public service.
Also, Direct Contributory (DC) reform Scheme has significant improvement on
workers welfare
Finally
Solutions were recommended to obviate deterioration on workers productivity.
TABLE
OF CONTENTS
CHAPTER
ONE: INTRODUCTION
1.1 Background
to the Study
1.2
Statement of the Problem
1.3
Objectives of the Study
1.4
Significance of the Study
1.5
Research Questions
1.6 Statement
of Hypotheses
1.7 Scope
of the Study
1.8 Limitation
of the Study
1.9
Definition of Terms
CHAPTER
TWO: LITERATURE REVIEW
2.0 Introduction
2.1 Concept of Pension
2.2.
Objectives of Pension Administration
in Nigeria
2.3 Types of Pension Scheme
2.4 Pension
Reform Act 2004
2.4.1 Role
of the Scheme
2.5.1
Benefits of Dc (Defined Contribution)
Scheme to the Stake-Holders
2.5.2
Benefits to the Individual Workers and
the Employers
2.5.3 Benefits
to the Government
2.6
Challenges of the Scheme
2.7
Role of the Accountants
2.8
Role of Government
2.9
Solutions to Effective Pension
Reform
2.10 Pension
Reform Practice in the Ministry of Education
2.10.1 Social Responsibilities
2.10.2 Services
2.10.3 Future
2.10.4.
Historical Background of Lagos State Ministry of Education
2.10.5 Statutory Responsibilities
2.10.6 Mission Statement
CHAPTER
THREE: RESEARCH METHODOLOGY
3.0 Introduction
3.1 Research Design
3.2 Research
Instrument
3.3 Sampling
Technique
3.4 Procedure for Data Collection
3.5
Procedure for Data Analysis
CHAPTER
FOUR: DATA ANALYSIS AND DISCUSSION
4.0 Introduction
4.1 Presentation of Respondents Demographic
Data
4.2 Presentation of Response to Research
Questions
4.3 Summary of Respondents’ Response
4.4 Test of Hypothesis
CHAPTER
FIVE: SUMMARY, CONCLUSION AND RECOMMENDATION
5.0
Introduction
5.1 Summary
5.2 Major Findings
5.3 Recommendation
REFERENCES
CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND
TO THE STUDY
The
pension reform act has become a socio-economic and political issue that has
engaged the attention of government, employers and workers not only in Nigeria,
but also in many developing countries of Africa, Asia and Latin America.
Before
the enacted and established- Olusegun-Obasanjo- led- pension reform of June 25th, 2004, Nigerian
operated a defined benefit (DB) pension Scheme, which was largely unfunded and
non-contributory. The system was also characterized as “pay-as-you-go” (PAYG) scheme since retires were to be
supported, not by their previous contributions, but by annual budgetary
provisions.
Thus,
the bane of this new Olusegun Obasanjo reformed pension scheme, was to review
the inefficient, ineffective and fraughting existing problems, merged with
insecurity some of these problems were desertion of unfunded state run pension
system which caused anguish, want and penurial existence for pensioner in their
old age.
a)
Problem of the harmonization of the
public and private pension system and
b)
Confusion as to the institutional
regulator of the scheme
c)
Problem of determining the law as that
governs the management, control administration and investment of pension funds
and
d)
Bad record keeping in private and public
offices making it impossible to access and quantify the contribution of
individual employee and endemic corruption.
Fashoyin,(1994)
Therefore,
in effect of this, the Olusegun Obasanjo-led-government incorporated the need
at reversing the situation through developing a system that is sustenance and
proned to providing the ultimate goal and capacity in ensuring stable source of
retirement savings for each participants.
With
this face in June, 2004 of the pension
Reform Act, 2004, a new pension was replace as against the previous DB Scheme(Defined Benefit).
The
new Scheme in-place of DB(Defined
Benefit), was the DEFINED
CONTRIBUTION (DC) Scheme, which was contributory in nature, and mandatory
on employers and workers (in the public and private sector organizations with 5
or more employees) to contribute 7.5% each of the emoluments of the employee
into a retirement savings account (RSA). However, for the military, the
contribution rate is 2.5% with the government contributing 12.5%. This system
has a number of features making it an increasingly vital component of the
pension systems of many countries not only in the Organization of Economic Corporation
and Development (OECD) countries,
but also amongst the developing countries, particularly in Asia and Latin
America.
However,
the current reforms are necessary in order to correct and repeat the old
pension Act 1990. According to Ibrahim ,(2004) who is a member of the national pension’s
reforms commission, the rationale for the pension reform includes:-
·
Weak and inefficient administration of
the old pension Schemes.
·
Unsustainable outstanding pension
liabilities estimated at N2billion and
·
Unregulated pension Scheme with highly
diversified arrangement.
The
current reform and necessary in order to bring sanity to a system that was glaringly
unable to cope with the challenges of the country’s pension system. When faced
with a situation of this kind, there are often two policy options introduction
of half-hearted measures that might have some appeal, but which may address the
symptom rather than the cause of the problem; or the adoption of reforms that
address the essential factors behind the underlying weaknesses of the previous
Scheme and adopt measures for which experience of other countries and their own
domestic imperatives points towards a huge potential for success, if only there
is the determination to pursue them. Of course, the government decided to adopt
the latter option. The government to President Olusegun Obasanjo has the
determination to pursue them and make a success out of the current arrangement.
Understanding and support of everybody, not least an important stakeholder like
this body, is required for the success of the Scheme, more importantly to
ensure retirees receive their benefit as at when due.
1.2 STATEMENT OF THE PROBLEM
Regardless
of the new scheme established to revamp the nation’s old pension scheme, there
are challenges that must be unraveled to make the new system function.
Experiences of other countries seems to suggest that a strong regulatory and
over sight body is required in order to deal with the major constraints that
could truncate the success of the Scheme. If unregulated, private pension
institutions could in their bid to compete against each other and maximize
profit, pursue promotional; expenses that could make the Scheme costly.
Literature however reveals that:
·
A weak regulatory environment could
jeopardize the success of the Scheme especially when private pension
institution embark on high-risk investment Schemes that could escalate the risk
of bank-ruptcy.
·
The weak regulatory system promotes
difficulties for the Scheme in coping with macro-economic fluctuation
especially during inflation and downsizing.
·
Despite it’s reforms, there is still the
existence of irregular pension payment that has led to the impairment and
untimely death of retirees on-cue or clamor for their entitlements.
When
weighed against the enormous potential benefits of the new Scheme, these
challenges are well worth facing with all the DC Scheme (Direct Contribution).
Therefore curbing these anomalies requires an effective and re-engineered
National pension commission (NPC) whose mandate is to provide overall
regulatory and oversight functions on all issues concerning pensions in
Nigeria.
1.3 OBJECTIVES OF THE STUDY
The
holistic objective of this research is to access the practice of pension
reforms in Lagos state ministry of Education, with reference to it’s pensions.
It is mandate
1.
To examine if retirement benefit is
received as at when due
2.
To ascertain and affirm it’s implementative
cause of saving
3.
To know if employees needs has been successfully
catered for from the Scheme
4.
To affirm it’s feasibility and how true
its being practiced
5.
To know if it’s been properly
administered in it’s payment and monitored via it’s uniform rules, regulations
and standards set for the public service of the federation, federal capital and
private sector
6.
To know the extent at which the new
pension reform scheme been benefitted enjoyed and felt.
7.
To ascertain how effective or otherwise
has been the activities of the PFC
(Pension Fund Custodian), PFA (Pension
Fund Administration) and NPC ( National Pension Commission)
1.4
SIGNIFICANCE OF THE STUDY
1.
The study is important because the
outcome will enable the researcher to know how effective and practicable the
new pension reform (DC) (Direct
Contribution) has been in Lagos State ministry of education.
2.
The outcome will unveil varieties of the
ascribed and stated pension fund administration used by the ministry
3.
It will assist the researcher to
understand how workers can allocate their retirement savings and diversity
their investment over a range of investment instrument
4.
The result will assist in facilitating
on how retirement savings account can be maintained by each employee.
5.
It will assist the researcher in
ascertaining how proper-maintenance of the Retirement
Savings Account (RSA) tend to generate massive long-term fund that could be
available for investment.
6.
The outcome will address how government
stands to benefit on extent to which fiscal discipline can be imposed in the
budgetary process to how pension obligations is can be accurately determined.
7.
It will assist the researcher to know the
parameters on how current weak regulatory systems can be remedified as against
it’s back drop relating to inflation and downsizing via recession
8.
Finally, the outcome will enable the
researcher to identify and enquire other sources and modalities through which
it’s current weak regulatory system can be curbed.
1.5 RESEARCH QUESTIONS
Based
on the research objectives, the study therefore seeks to provide answers to the
following questions:
·
Is the pension Reforms via RSA (Retirement Saving Account)
practically existing and functioning in Lagos State Ministry of Education?
·
Has the pension Reform being benefiting
to meeting the welfares of employees at workplace?
·
Are employees receiving their retirement
benefit as at when due?
·
Are there other paid out benefit
attached to the scheme inform of life annuity in protection of longetivity
risks etc.
·
What are the basic rules, regulation and
standards enacted, being complied to ensuring effective pension Scheme
·
How active is the framework and modalities to sustainable pension Schemes
in areas of Pension Fund Administration
(PFA) been, devoid of scams and misappropriations
1.6 STATEMENT OF HYPOTHESES
HYPOTHESIS 1
H0 Direct
contributory (DC) of the pension reform act is practically not existing in the
public service.
H1
Direct Contributory (DC) of the pension
reform act is
practically existing in the public sector.
HYPOTHESIS II
H0 Direct Contributory (DC) reform Scheme has
no significant improvement on workers welfare
H1:
Direct Contributory Pension (DC) reform scheme has a significantly improvement
on workers welfare.
1.7 SCOPE OF THE STUDY
The
study examines the state of pension Reforms in the public sector, with special
focus on the Lagos State Ministry of Education, Alausa, Ikeja, Lagos State. In
reference to the impact of the National Pensions Commission, towards ensuring
compliance and sanity in coping and tackling the challenges of the nation’s
pension plagues.
The
target respondents aimed for the study are majorly public servants from the
top, middle and lower staff of the organization.
1.8 LIMITATION OF THE STUDY
The
limitating factors encountered in the course of this study were:
·
Limited time to the assigned research
and response giving
·
Distance
·
Stress and it is vigors
·
Traffic barriers
·
Poor participation on the part of the
workers due to busy schedules or task delegated to be immediately attended to.
·
Collection of incomplete data
in-contradiction to the initial numbers distorted
·
Limited time
·
Lack of co-operation from respondents
·
Financial constraints and
·
Secrecy to sensitive question due to
fear of uncertainty
1.9 DEFINITION OF TERMS
·
PENSION:
is the entitlement or rights given to an employee/ employees after meeting some
specific requirement; thus given as periodic payment or gratuity. Exist both in
the public and private sectors
·
DIRECT
CONTRIBUTORY (DC):
The newly introduced and enacted pensions Act of 2004, through the Olusegun
Obasanjo regime, that was used in place of the initial D.B (Defined Benefit)
and correct the inefficiencies and deficiencies of the old system.
·
EMOLUMENTS:
A specific percentage of employee salary which is automatically deducted as
saving in accumulation of the entitlements to be received after retirement. It
could be annual or monthly.
·
PARAMETERS:
As known as modalities ,explains the solutions of panacea to which an existing
problem can be tackled.
·
REGULATION
ENVIRONMENT: Meaning the basic institutions and
activities through which pension is determined and operated-upon, such as:
§ PFA
(Pension Fund Administrator)
§ PFC
(Pension Fund Custodian)
§ NPC
( National Pensions Commission)
·
SCHEME:
A program package or specific provision design for some basic or particular set
of people or individuals
·
RETIREMENT
SAVING ACCOUNT (RSA): An accounting record open-ended by
the pension fund administrator for every registered employees through which
their deducted emolument is been stated, monitored and managed.
Click “DOWNLOAD NOW” below to get the complete Projects
FOR QUICK HELP CHAT WITH US NOW!
+(234) 0814 780 1594
Login To Comment