Implementation of the 2004 Pension Reform Act in Federal Tertiary Institutions in the South East States, Nigeria

Abstract

The work evaluated the implementation of the Pension Reform Act 2004 otherwise called the contributory pension scheme in Federal Tertiary Institutions in South East Sates, Nigeria. The objectives of the study were; to find out whether or not the scheme has an impact on the payment of retirement benefits to the retired employees of selected federal Tertiary Institutions in the south East States, Nigeria; to identify reasons for the delays in the payment of pension and gratuity in the selected institutions; ascertained how the new pension act will help to solve the problem of pension administration in Nigeria; trace the history of pension in three other countries (USA, Japan, and Canada) to make comparison and possible incorporation into the Nigerian Pension Act 2004. The work concentrated on the aspect of the study that has not been given adequate attention, which is the gap in literature – Review of the activities of those involved in the implementation of the new Pension Reform Act 2004 and to find out if the provisions of the Act are well implemented. The work, a survey research made use of research questions/hypothesis. The population of the study is the Federal Tertiary Institutions in the South East States, Nigeria made up of Abia, Imo, Anambra, Enugu and Ebonyi States. The target population is the four randomly selected Federal Tertiary Institutions in the zone namely University of Nigeria, Nsukka, Enugu State; Federal University of Technology, Owerri Imo State; National Root Crops Research Institute Umudike Abia; State and Federal Polytechnic Nekede Owerri Imo State. Data were collected from primary and secondary sources (interviews and documents). The study covered only retirees under the new pension scheme, effective 2007. The study technique applied is the inductive method because of the nature of the data involved – qualitative data. The systems theory as propounded by Talcott Parson was used for framework. The study result shows that the application of the provisions of the Pension Act has a positive impact on the employees’ retirement benefits or pension and gratuity in the selected institutions. The work concluded by way of recommending the following: -

Extension of the scheme to the other levels of government (Local and State),

Provision of enabling environment for the smooth running of the scheme,

Government should provide relevant legal framework to insure political, economic and necessary support for the scheme.

Pension Commission (PENCOM) should ensure effective monitory of all players and adequate sanction of erring operators.

Increase in contributions from 15% to 40% to be shared by the employer/employee at the ratio of 3:1 (75% & 25%).

Introduction of multiple pension schemes as is obtainable in advanced countries.

(vii)   Proper management of the funds by way of investing it adequately among others.

Key words: Pension, Reform Act, 2004, Implementation, Federal Tertiary Institutions, South East States, Nigeria.