CHAPTER ONE

1.0INTRODUCTION
1.1BACKGROUND OF THE STUDY
The greatest challenge to government worldwide remains the issue
relating to pension fund management. A financial analyst called Alexandra
Forbes argues
“Pension Management, world over, has become
an increasingly great concern to most government
and countries of the world”.
And coming to Nigeria, the country was guided by a number of pension
regimes prior to the promulgation of the pension Act 2004, pension schemes
in Nigeria had been bedeviled with many pitfalls. The public service
operated an unfounded defined benefit schemes and the payment of
retirement benefits were budgeted annually. The annual budgetary allocation
for pension was often one of the most vulnerable items in budget
implementation in even where budgetary provisions were made, inadequate
and untimely release of fund resulted in delays and accumulation of arrears
of payment of pension rights. It is then obvious that, the defined benefit
scheme could not be sustained.

In the private sector on the other hand, many employees were not
covered by the pension scheme put in place by their employers and many
other schemes were not funded. Besides, where the schemes were funded,
the management of the pension funds was full of malpractices between the
fund management and the trustees of the pension board.

The scenario agitated a re-think of pension administration in Nigeria by the
then President Olusegun Obasanjo`s administration, accordingly, the
administration initiated a pension reform in order to address, eliminate and
eradicate the problems associated with pension reform act 2004.
Good times come and go, retirement is definite, and the question
therefore is “Can people still live a good life after retirement”? The non-
implementation of budgeted income to pensioners, a non-effective strategy
for pension administration is seemingly a growing problem in Nigerian
economy. Some retirees are forced to continue to work throughout their life
not out of choice but for lack of means of sustenance at old age. They are
therefore forced to go in search of menial jobs to make ends meet, since they
are not even sure of getting their pensions.
Apart from the stress associated with working at old age, how
relevant can an individual be at age 70 or 80 in the face of ever changing
knowledge brought about by advancement in technology? Besides, of what
use is life without rest at old age? Even where one is willing and able to
continue working, the opportunity for the elderly to continue working is
declining. However, it is against this backgrounds that the researcher wishes
to develop effective strategy for pension administration in the Nigeria public
sector.

1.2 STATEMENT OF THE PROBLEM
First comes the layoffs then pay cuts finally a delay in the payments
of benefits due to poor policy formulation and implementation, incorrect
record keeping and inadequate accountability of public funds. The non-
implementation of budgeted income to pensioners, delay in the payment and denial of pension accrued to pensioners leading to pensioners protesting over non-payment of pensions and non-compliance with ethics of public financial management.

1.3 OBJECTIVES OF THE STUDY
The aims and objectives of the study are to ;-
1. To proffer solutions to the problem that brings about a non-effective and efficient management in pension administration.
2. To identify measures and steps dealing with the issues of poor implementation of budgeted income to pensioners.
3. To examine the quality of personnel in various pension boards.
4. To ascertain whether the administration of pension funds are done judiciously.

1.4 TEST OF HYPOTHESIS
For the purpose of the study, the following hypothesis were put forward;-
1. Ho : Non-effective and efficient management cannot be compared to poor pension administration.
2. Hi : Non-effective and efficient management can be compared to poor pension administration.
Ho : The budgeted income to pension are not implemented as at when due.
Hi : The budgeted income are implemented as at when due

1.5 RESEARCH QUESTIONS
1. Can people still live a good life after retirement?
2. Why poor policy formation and implementation of pension benefits?
3. Does incorrect record keeping and inadequate accountability of public
funds case delay pension benefits?
4. Does non-implementation of budgeted income to pensioner leading to
pensioners protesting over non-payment of pension?
5. Does non-compliance with ethics of public financial management cause
problem of pension?

1.6 SIGNIFICANCE OF THE STUDY
Holistic change is required in order to create a framework that will
enable consumers have a greater financial security at old age. This study
signifies a whole lot; it is intended to find out the intrinsic and extrinsic
cause of poor pension administration. The findings will hopefully:
1. Assist the researcher that although simple in nature will
a. Effect radical improvements in the administration of pension funds
b. Deliver significant benefits to all consumers when they retire.
2. Serve as a guide to public official in charge of this administration of
pension funds to pensioners.
3. Assist the governments in setting priorities according to their social
fiscal policies.
4. Enable providers of pension, plans quickly to improve the flexibility
and appropriateness of today`s product.
However, it is the researcher`s belief that greater attention to ethical
and social responsibilities will improve the way pension funds are
managed and ministered.

1.7 SCOPE OF THE STUDY
This project work is concerned with an effective strategy for
pension administration in Nigeria public sector. The work will be limited
with pension commission (PENCOM) and with other relevant areas
such as pension scheme for civil servants, pension governance, Nigeria
Social Insurance Trust Fund, Contributory pension scheme.

1.8 LIMITATIONS OF THE STUDY
1. Developing effective strategy for pension administration in the Nigeria
public sector (a study of pension commission) has not been an easy task due
to inaccessibility to some relevant materials most managers of government
prostrate perceived this research work as adding their companies thereby
withholding vital information.
Consequently, some staff of the pension bodies was reluctant to discuss the
subject freely.
2. Time factor is also another problem, which affected the compilation of
this work, despite the high scheme in the school; period allocated for the
project work must be strictly worked towards.
3. The incessant bombing in the country thereby posing everybody a prime
suspect also was one of the limitations.

1.9 DEFINITION OF TERM
1. PENSION: is a fixed sum paid regularly to a person, typically given
retirement from service.
2. PENSION FUND: is any plan, fund or scheme which provides
retirement income.
Pension should not be confused with severance pay; the former is made in
regular installments while the later is paid in one lump sum.
3. RETIREE: is one who has retired from active working life. Retirees
receive pension.
4. GRATUITY: is money given to an employee in return for service(s)
at retirement.
5. LUMP SUM: is a single payment for a number of separate items,
money paid in full rather than in several smaller amounts.
6. ANNUITY: is any terminating stream of fixed payments over a
specified period of time.
7. PENSION ADMINISTRATION: is the management of pension
funds and fairs.
8. PRE-REQUISITE: is a thing required as a condition for some other
things to happen or exist.
9. PUBLIC SECTOR: is the part of an economy concerned with
providing basic government services. These include services such as
Police, Hospitals, Schools, Military and Public transport.