AN APPRAISAL OF PENSION REFORM ACT AND ITS IMPLEMENTATION IN NIGERIAN PUBLIC SECTOR (A CASE STUDY OF RIVERS STATE MINISTRY OF WORKS)
Pension as a form of social security against old-aged poverty and other uncertainties have great interest virtually everywhere in the world, both in developed and developing countries, in recent times. Pension programs especially those that are publicly financed and administered, have become an issue of concern to economists, policy makers and the general public for effective implementation. This is not only because such programs are central to the well-being of the pensioners and the elderly, but also, the majority of pension programs are not actuarially balanced (that is, they are not financially stable), and as such, they are run at deficits, thus making the present values of their future liabilities to be enormous.
The present civilian administration extended its form programs to the administration of pensions in the public service. The reform holds an overall objective of reorganizing the pension scheme and the various institutions charged with the administration of pension in Nigeria. The reform overhauled the entire machinery of the pension system through a holistic redefinition of its essence, as a mechanism of participatory savings for the proverbial rainy day.
Pension scheme is a transfer programs that serves as a channel for redistributing income to the elderly or retirees, after a stipulated number of service years. A pension is usually a regular payment made by the government or private companies or organizations to their retirees, as a form of social security against old-aged risks and uncertainties. In addition, pension scheme/programme are also used to promote a saving culture among current employees, and this stimulates saving.
Nigerian pensioners are suffering badly from the stings of the problem of public pension scheme, which was largely governed by pension decree No.102 of 1979. It has features persistent problems in recent times, especially in civilian regime. Some of the problems are:
- The dependency of pension scheme and the erratic budgetary allocation to the federal government.
- The untimely release of pension scheme.
- The untimely release of pension funds which affects the payment of pension benefit and other retirement benefits
- A huge accumulation of pension liabilities, among several others.
The present pension reform, repeated the previous pension Act No.102(cap 346) of 1979. It replaced it with pension reform Act 2004 , as amended in 2014 which gives legal backing to the reform specifically by sec,11(5) of pension reform Act 2004,as amended in 2014 employers are required to deduct from source the monthly contributions of their employees and remit same together with their position, directly to the account designed by pension fund administration(PFA). Remittance of work must be made within seven (7) working days from the date of payment of salary of employees. Failure to comply with the requirement, constitute an offence under sec.11 (7) and 89 of the pension reform Act 2004 as amended 2014.
Finally, a greater importance has been given to pension and gratuity by employers because of the belief that if employees future needs are guaranteed, their fears ameliorated and properly taken care of, they will be more motivated to contribute positively to organizations output. Similarly various government organizations as well as labor union have emphasized the need for sound, good and workable pension scheme.
- STSATEMENT OF THE PROBLEM
Several years before pension reform, most pension scheme in the public sector has been under funded, owing to in adequate budgetary allocations. Budget releases which seldom came on scheme where far short of due benefits. This situation has resulted to unprecedented and unsustainable outstanding pension deficits estimated at over N2trillion before the commencement of PRA in 2004.
First, comes the layoffs then pay cuts finally a delay in the payment of benefits due to poor pension policy formulation and implementation, incorrect record keeping and inadequate accountability of public funds. The non-implementation of budgeted income to pensioners delay in payment and denial of pension’s accrued to pensioners leading to pensioners protesting over nonpayment of pension and non-compliance with ethics of public financial management.
In Nigeria, to collect retirement benefit became problematic and a source of hardship to retirees. The Nigerian pension system had been plagued by week and restrictive investment practices, under funding and mis-management in addition to poor corporate governance. These problems led to the institutionalization of pension reform in 2004 to make pension payment less burdensome and more efficient.
It is on this background that this study sought to investigate how the ministry of works Rivers states addressees pension reforms act vis-à-vis its implementation.
1.2OBJECTIVE OF THE STUDY
- To examine the impact of pension reform and implementation on the welfare of retirees in the ministry of works Rivers State.
- To identify the benefits/importance of pension reform act on pensioners of ministry of works Rivers State.
- To access the strategies for efficient pension scheme in Nigeria with particular reference to ministry of works Porthacourt.
- .To examines challenges that are affecting effective pension reform and implementation in the ministry.
- .T o recommend ways of implementing pension reform scheme in ministry of works Rivers State.
1.3 RESEARCH QUESTIONS
- What are the impacts of pension reform and its implementation on the welfare of retirees in ministry of works Rivers State.?
- What are the benefits of pension reform act on pensioners of the ministry of works Rivers State?
- What are the strategies for efficient pension scheme in Nigeria with particular reference to ministry of works Rivers State.?
- What are the challenges that are affecting effective pension reform and implementation?
- How can pension scheme be implemented in the ministry of works, Rivers State?
1.4 RESEARCH HYPOTESIS
HO: pension reform and implantation has no impact on the welfare of retirees in the ministry of works Rivers State.
H1: pension reform and implementation has impact on the welfare of retirees in ministry of works Rivers State.
H0: pension reform act has no benefit on retirees in the ministry of work. Rivers State.
H1: pension reform has benefit on retirees in the ministry of works Rivers State.
H0: pension scheme has no effective strategies for efficient pension system in Nigeria with particular reference to ministry of works Rivers State.
H1: pension scheme has effective strategies for efficient pension system in Nigeria with particular reference to ministry of works Rivers State.
H0: pension reform and implementation has no challenge that is affecting the system.
H1: pension reform and implementation has challenges that are affecting the system.
1.5 SIGNIFICANCE OF THE STUDY:
In this research, the significance of the study is to bring together the various ways and facts as regards to the subject matter, Appraisal of pension reform Act and its implementation in Nigerian public sec tor
- It is believed that the outcome of this research work will be of interest to Government, individuals and to the corporate organization.
The research work will provide them with vital information regarding