ABSTRACT
This project work is focused on management of Pension Fund in Nigeria: challenges and Prospects The project is aimed at examining the challenges faced by management of pension fund in Nigeria and achievement or prospects recorded so far. The writer in reviewing literature of this work employed a historical method. In chapter three the researcher made use of survey research plan in which questionnaires were split into section, stratified random sampling were equally applied and statistical data were extracted and used. Furthermore, the writer formulated hypothesis in line with the problems and objectives of the study. However, product moment coefficient of correlation were used to test the hypothesis in which the following result emerged. The amount of pension fund contribution has a high positive relationship with asset investment portfolio and prospect on amount of contribution were recorded. The FGN bond capital market has a high positive relation with asset investment of pension fund which created prospect to pension fund investment system in Nigeria. Biometric system assists to dictate fraud and encourage proper investment of pension fund in Nigeria. Data collected were analysed and presented with tables and percentages. In view of the findings made, the following recommendation accrued from the result of the research work: Ethics and moral standard should be built. Prompt and regular payment of pension should be adopted, proper investment and expansion of asset investment portfolio should be encouraged. Adequate training should be given to management on how to make effective and efficient use of biometric system.
CHAPTER ONE INTRODUCTION
1.1 BACKGROUND OF THE STUDY
The management of Pension Fund in Nigeria is as old as Nigeria itself. Pension fund was introduced by the colonial masters to provide income and security for old age British citizens working in Nigeria upon retirement as a post-retirement benefit to employees. In the view of Adesina (2006:7), Nigeria Legislative instrument on pension matters was the pension ordinance of 1951 which had retrospective effect from 1st January, 1946. In 1961
National provident from (NPF) scheme was established with the legislation to address pension matters n private organizations. Eighteen years later Pension Fund Act No. 102 with Armed Forces Pension Act No. 103 came up the same year in 1979. In 1987 police and other Government Agencies Pension was enacted under Pension Act No. 75. The Local Government Pension edict followed suit in 1987. By 1993 the National Social Insurance Trust Fund (NSITF) was established by degree No. 73 to replace the defunct NPF. In 1994 employees in private sector were equally accommodated by the scheme for lost of
employment income at old age, invalidity or death.
Due to poor funding, inadequate budget allocation huge arrears of outstanding pensions, improper regulation and supervision, management of pension fund in Nigeria decided to put a new Pension Reform Act in 2004. Though prior to the reform according to Balogun (2006:18), public organization operated a defined benefit (pay-as-you-go) scheme final entitlement were based on length of service and terminal emoluments. The defined benefit (DB) scheme were funded by Pension Department of the office of the Head of Service of the Federation.
The Pension Reform Act 2004 is the most recent legislation of the Federal Government at reforming the pension fund system for both private and public sectors. Atedo N.A. (2006:9) sees, “The Act” as a compulsory Contributory Pension Scheme (CPS); has been established for all categories of workers in the Federal Capital Territory Federal Public Service and in the private sector. The Pension Fund Scheme became a challenge to the government as it could no longer cope with payments of pensions and gratuities to retiring work force. This is apparently due to the fact that there was no
plan put in place to forestall the challenges of poor funding caused by inadequate budgetary allocation. The administration and management of pension fund was also generally characterized by weak regulatory framework inefficient and non transparent (Nkanga, 2005:16). Meanwhile, according to Ahmed M. (2006:2), Board of trustees of parastatal were free to decide on whether to maintain an insured scheme or self administered arrangement.
Moreover, prospect has been achieved in the area of amount contributed, investment of the fund and use of biometric to gather accurate data and reduce fraud.
Based on the foregoing the researcher intend to study management of pension fund in Nigeria, challenges prospects.
1.2 STATEMENT OF THE PROBLEM
The idea of management of pension fund in Nigeria was designed to carter for the welfare of the pensionable retired workers. This had for long gained global recognition and acceptance. Workers whether in public or private sectors are expected to leave comfortable life devoid of any form of dependency after retirement from active services.
The management of pension fund in Nigeria have continued to pose a serious challenge to both government and private sector organizations in Nigeria, among these problems and challenges one.
-Non availability or improper records/data storage in the system.
-Improper investment of pension fund and inadequate funding of the scheme.
-In competent and inexperience with lack of trained pension staff which has resulted in uncoordinated administration.
-Weak regulatory framework, inefficient and non transparent system.
-Perpetual frauds/irregularities without appropriate sanction on the perpetrators,
-Inability of the regulatory and supervisory agencies to monitor pension fund schemes.
-Inability to determine appropriate investment portfolio especially in this period of economic melt down.
It is against this challenges and problem that the researcher wishes to carry out a research work on
management of pension fund in Nigeria, challenges and prospects.
1.3 OBJECTIVE OF THE STUDY
The study will examine management of pension fund in Nigeria; challenges and prospects. Thus the study is set out to achieve the following objective.
-To identify the challenges and prospects of management of pension fund in Nigeria.
-To ascertain if management of pension fund have enlarged the amount contributed through contributory scheme in Nigeria.
-To evaluate and see if there are any prospect in management of pension fund assets investment portfolio in Nigeria.
-To know whether the new biometric system has contributed to check fraud and enhance management of pension fund in Nigeria.
-To find out whether investment of pension fund has an input in
FGN bond capital market in Nigeria.
-To advice management of pension fund in Nigeria on the strategies to improve pension fund management.
1.4 RESEARCH QUESTION
The research is set out to answer the following questions.
!What are the challenges and prospects of Management of
Pension Fund in Nigeria?
!Does the amount contributed in pension fund through contributory scheme witness growth as a result of increase compliance by employers and employees from management of pension fund in Nigeria?
!What value of assessment can be accorded to pension fund
investment portfolio on pension assets management in
Nigeria?
!Does the new biometric programme system assist to check fraud and enhance management of pension fund in Nigeria?
!Does the investment of pension fund has any input in FGN bon capital market in Nigeria?
!What are the strategies to improve pension fund management in
Nigeria?
1.5 RESEARCH HYPOTHESIS
As a guide in the collection of data for the study certain hypothesis have been formulated which include:
Hi:The amount of pension fund contribution has a significant effect
on assets investment portfolio of pension fund management in Nigeria.
Ho:The amount of pension fund contribution has no significant
effect on assets investment portfolio of pension fund management in Nigeria.
H2:FGN bond capital market has a significant effect on assets
investment of pension fund management in Nigeria.
Ho:FGN bond capital market has no significant effect on assets investment of pension fund management in Nigeria.
H3:Biometric system encourage staff training dictate fraud and has
significant effect on investment of pension fund management in Nigeria.
Ho:Biometric system encourages staff training, dictate fraud and has no significant effect on assets investment of pension fund management in Nigeria.
1.6 SIGNIFICANCE OF THE STUDY
The research is systematically meant to be practical and educative in the sense that it is going to assist in exposing some of the challenges and prospect in management of pension fund in Nigeria. Essentially, this work is a step in a right direction to assist and enlightened the general public and the stakeholders in the pension scheme.
Furthermore, employers of labours and the employees (which include those still in the service and those who have retired from service) the pros and corns of investment in pension fund and the benefits of contributing to the scheme. This research work will equally serve as a guide for those in academic institutions, the regulatory authorities, the government and the banking industry, other areas that needed adjustment in the scheme that will benefit the workers at the old age, so as to actualize the motives of establishing the
board, this will add more knowledge to those in the field of research and improve more literature in the field.
Finally the study is aimed at been beneficial to policy makers, corporate and non corporate and non corporate organizations in Nigeria on how many invested in the possession fund scheme are been utilized and invested.
1.7 SCOPE AND LIMITATION OF THE STUDY
The scope of the study is centre on management of pension fund in Nigeria; challenges and prospects. Due to the nature of the study the scope of the study will cover National Pension Commission of Nigeria in Enugu. The choice of limiting the scope to National Pension Commission in Enugu is for easy assessment of data and information required for the research work.
It is necessary to mention that the research was beset with many problems such as: dearth of data, in complete response and some misleading information from respondents.The researcher was objective in analyzing the data generated from the respondents.
Other limitation of the study, were lack of finance coupled with very short period which the research used in combining the academic programme and other personal obligations. However, these limitations are considered so serious as to affect its validity.
Meanwhile the scope of time coverage for the research will be a period of six years since the new pension act was in 2004.
1.7 DEFINITION OF TERMS
!Joint Tax Board
This is an approved body that monitor the activities of private sector pension schemes.
!Nigeria Social Insurance Trust Fund (NSITF)
Provide and enhance social protection to private sector employees.
!National Pension Commission (PENCON)
Is an apex body of pension industry in Nigeria that regulate and supervise the business of pension companies.
!National Insurance Commission (NALCOM)
It is an independent body responsible for licensing and regulating insurance companies in Nigeria.
!Pension Reform ACT 2004 (PRA)
This is the body under the Pension Reform Act 2004 that regulate the activities of all pension matters.
!Pension Fund Administrators (PFAs)
They are Private Limited Liability Companies licensed to manage pension funds under the Pension Act 2004.
!Pension Fund Custodian (PFCs)
They are banks license to hold the pension fund assets on behalf of the PFA.
!Retirement Savings Account (RSA)
This is where the monthly contributions of employees are kept for safe custody.
!Security and Exchange Commission (SEC)
These are manages under pension scheme license to manage pension funds.
This material content is developed to serve as a GUIDE for students to conduct academic research
Project 4Topics Support Team Are Always (24/7) Online To Help You With Your Project
Chat Us on WhatsApp » 09132600555
DO YOU NEED CLARIFICATION? CALL OUR HELP DESK:
09132600555 (Country Code: +234)
YOU CAN REACH OUR SUPPORT TEAM VIA MAIL: [email protected]
09132600555 (Country Code: +234)