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Table of Contents

Cover page                                                                                       i

Title Page:                                                                                        ii

Approval Page:                                                                                iii

Declaration:                                                                                               iv

Certification:                                                                                             v

Dedication:                                                                                       vi

Acknowledgments:                                                                                    vii

Table of Contents:                                                                                   viii-ix

Abstract:                                                                                          x




1.1     Background of the Study                                                          1

1.2     Statement of the Problem                                                          5

1.3     Research Questions                                                                           5

1.4     Purpose of the Study                                                                          6

1.6     Significance of the study                                                          6

1.7     Scope of the study                                                                    7

1.8     Limitation of the Study                                                            7

1.9     Operationalization/Definition of Terms                                              8

1.10   Organization of the Study                                                                  10


Literature Review and Theoretical Framework

2.1     Literature Review                                                                     11

2.2     Theoretical Framework                                                            27


Research Design and Methodology

3.1     Research Design                                                                      29

3.2     Ares of the study                                                                      29

3.3     Population of the study                                                             29

3.4     Sample and Sample technique                                                  29

3.5     Instrument of Data Collection                                                            30

3.6     Reliability and Validity of the Instrument                                           30

3.7     Distribution and Retrieval of Instrument                                             30

3.8     Method of Data Analysis                                                          30



4.1     Data Presentation                                                                     31

4.2     Analysis of Research Question                                                 34


Summary, Conclusion and Recommendation

5.1     Summary                                                                                 42

5.2     Conclusion                                                                              43

5.3     Recommendation                                                                     44

References                                                                               46

          Appendix                                                                                48

          Questionnaire                                                                         49


This research work is aimed at examining the management of pension  schemes in Nigeria public service and life after service  with particular reference to Enugu metropolis with the intention of finding out if there are more efficient and effective ways of achieving the objectives of a pension scheme. This research work is divided into five chapters. Chapter one-which is the introduction consists of the background of the study, statement of the problem, significance of the study, purpose of the study, scope of the study, Limitations and definition of terms. Chapter two talks about the literature review, which include the review of some authors on problem of pension fund in Nigeria. Chapter three has to do with methods of data collection, techniques used and administration of the instruments. Chapter four shows the analyses of data, which are broken into questionnaire and interview analysis. Chapter five, which is the last chapter indicates the summary, conclusion on the research and recommendations made by the researcher.



Title page

Approval Page

Certification page




Table of Contents


  • Background of the Study
  • Statement of Problem
  • Objectives of the Study
  • Research questions
  • Significance of the Study
  • Delimitation/scope of the study
  • Limitations of the study
  • Definition of important Terms.


2.0 Sources of Literature

2.1 The principles of pension scheme management

2.2 The new public service pension scheme

2.3 Need for management of pension scheme

2.4 The problems and prospects in management

2.5 Who are supposed to receive this pension scheme



3.1. Research Design and methodology

3.2. Population of the study

3.3 Sample selection for the study

3.4. Sampling Techniques

3.5. Method of data collection

3.6 Validation of data collection

3.7 Reliability of data instrument

3.8 methods of data presentation and Analysis


4.1 Data Presentation

4.2 Data Analysis

4.3 discussion of result


5.1 Summary of findings

5.2 Conclusion

5.3 Recommendations








Pension systems are sensitive issues especially in low-income developing countries like Nigeria where most employees neither have any meaningful retirement benefits nor earn enough during their working lives to cater for their retirement period (Awosike, 2009). The lifestyle of many employees depend to a large extent on many factors, some of which include one’s culture, his preferences, level of resources, and the surrounding economic and social environmental factors. The subject of retirement has been attracting increasing attention in many organizations in Nigeria. According to Nwachukwu (2000) many factors account for this renewed emphasis:

  1. a) No employee is expected to work throughout his/her entire life on earth; arrangements must be made for old age.
  2. b) The life expectancy of many Nigerian workers has increased and a majority of them are expected to work until they retire. Even those who believe that death could come at anytime have the hope that their retirement benefits would be given to their next of kin.
  3. c) The extended family system, which in the past helped retirees, is gradually losing its impact to western culture and influence.
  4. d) There is increasing awareness and emphasis that people no matter the age should learn to be independent or self-supporting.
  5. e) The government has enacted laws encouraging employers to pay retirement benefits and gratuities to qualified retirees. Employees too are encouraged to contribute to pension plans, stock options or other forms of differed compensation contracts until retirement age.

Due to the above scenario, employees and retirees are advocating and agitating for more enlightenment and education in planning for retirement life. Employers too are not left out as more and more qualified and productive manpower is demanding for greater security at work and financial benefits and pension after retiring. For employees, there is a fundamental desire to keep updating their skills and improving their productivity in order to earn more and be able to cater for the present and indeed the future, which is the period of retirement from regular paid employment.


The work that one does gives status to the person. It also gives a meaning to life and feelings of contribution to general welfare. Work also permits a person to be active energetic and to have constructive social interaction with others. In spites of the fact that work brings fulfillment. One must retire from active service for one cannot deny the fact that as workers grow older, they make many adjustments and tend to develop gradually into a social group that is separate from the younger worker. Increasing physical and mental limitation associated with advancing age; make it difficult for such people to work safely and competently thereby maintaining previous levels of performance. As the stage of retirement the worker’s output reaches diminishing return. It becomes necessary for the worker to stop working if his employer wants to minimize loss although not everyone would welcome the ideal of retirement even with a generous pension.

Retirement as defined by J.A Donnelly et al (1992:326) the changes in job situation whereby the individual gives up his job when diminishing return set in. Eze (2001:15) explained retirement as the stage where the employer is dissatisfied by the job performance of the employee.

The German chancellor, OHO UON Bismacclc in 1880’s started the concept retirement. His public pension plan supported a retirement age of sixty-five years. Insurance companies began to use that retirement age in planning retirement and annuity programmes, though the retirement age vary in countries and organizations, Nigeria operates one of the most generous pension scheme in the world. After ten years of services, an employee qualifies for pension. An employee could then retire and enjoy the rest of his actives life. Result of pension scheme is that the public services is seen as being more lucrative in terms of a person’s work life. Pension is defined as a kind of annuity for the retired public servants for life (in some cases also his dependents after his death) pension is paid in fixed monthly amount often times a certain percentage of the salary. From the government point of view the pension is given in recognition of long monotonous services. The pension system unless specially adopted to meet the hardship to the family of a white collar or blue collar worker, who dies prematurely in service or on the verge of retirement or before enjoying the pensionary benefit for any appreciable period (Abah. 1997) pension do not involve any ask or trouble to the employee after retirement.

Pension can be classified as contributory and non contributory when both the government and the employee contribute (not necessary equally) towards its payment. It is non-contributory if the whole amount for its payment is funded by the government or the employer any. There is no much of difference between the two financially speaking. For if the pension scheme is non contributory, the salaries will be proportionately lower and vice versa. Employee’s contribution creates a sort of night for him to pension and he may claim a voice in the management scheme.

History of pension in Nigeria in 1951, pension benefits were introduced into public sector, taking effect from 1946, it brought about a major attraction for employment in the public service. The pension act 102 of 2009 was the main legislation guiding the entire public service. To qualify for pension, later in 1992. It was reformed to minimum of 10 years for pension and 5 years for gratuity.

In 1992, parastatals inaugurated board of trustees for the management of their scheme. Their responsibilities were to decide whether to opt for self administered or insured schemes. One notable fact during this period is that pension was more successful in private sector; most schemes were insured scheme defined by contributions of employees and employers. It provided large sums of retirement benefits or earlier with drawl pension fund managers, portfolio managers, bankers were relevant in pension fund management in the private sector.

Later, Decree 77 of 1993 established the Nigeria social insurance trust fund (NSITF) to replace the old national pension fund managed by the federal government for private sector under this scheme, there were poor administration inadequate delivery system and lack of adequate records of movement from one employment to the other. The enactment of the new pension Act 2004 signed into by president Olusegun Obasanjo of pension fund (Dlke, 2006). Guiding the new pension regime is the national pension commission which is the apex regulatory body and the establishment of pension fund administors and custodians (PFAs and PFCs).

This pension scheme regulated by the pension commission is also private sector driven with government only playing its part by contributing its quota to the relevant pension managers for public servants. Provisions of the pension Act of 2004 all government agencies and private organizations staff must ensure that all its employee’s have pensions. The penalty for non-compliance includes a 2% per month charge of low remitted amount as long as the fault persists. The pension funds must be managed by a national pension fund administrator (PFAS) licensed by the national pension commission and fund must be deposited with a pension fund custodian (PFC) Licensed by the national pension commission. Contribution by employee’s is 7.5% of their monthly emolument comprising basic salary, housing and transport allowance to be matched by employer’s contribution of 7.5% every month. This brings it to a total of 15% every month. In case of military personnel, the contribution per employee is 2.5% while the employer contribution is 12.5%.

At the period of retirement, it is important that the future life of the worker be considered by planning for his welfare. This means to pay a consideration that will help the worker to go on with life. Several reasons have been given for the need for such compensation prominent among the reasons is to provide economic security for the employee at retirement. Secondly it guarantees the willingness of the younger generation to work and also see the organization a good place to work in.

It is therefore of a great importance to carry out a study on the management of pension scheme in Nigeria to find out the lapses. The need for the study can be linked to economic empowerment, restoring the dignity of the work and creating a place for the younger generation. The government is seen here, as employer while the public servant is the employee. The study will concentrate on management of the scheme and the areas of shortcomings.

According to Osuagwu (2002:12) have observed that bureaucratic bottlenecks are hindrances to management of pension scheme. He however contended that dwindling resources is not short of the reasons for such problems. This research will investigate the government and the pension managers to ascertain the origin of the problem.



The issue at the back of government mind while establishing the pension scheme is to provide the employee with a means of securing on retirement a standard of living reasonably consistent with that which years later, we can see that the reverse has been the case, the worker decides to create retirement, just like death. In developed countries, the worker looks forward to retirement. The reason for these are not short of good management.

The management of pension scheme has made things so hard for the worker that a retiree has to travel long distance to get his pension paid. It has been observed that those who are retired, while pursing pension papers in Abuja or Lagos end up running out of cash to sleep under bridges, railways stations post offices, churches or mosques.

The head of service of the federation while addressing pension desk officers said among other things, “Pension scheme in Nigeria have been inefficient mainly due to inadequate funding. Ignorance of employer’s, mismanagement of funds and gross indiscipline of pension managers the effect of these to our economic development could be very drastic. That is why this research is intended to suggest solution to the problem of mismanagement of pension schemes. A hindrance to the fight against bribery, corruption and also hindrance to development. This research deals with the problem of weak financial base as the most delimiting factor towards the management of pension scheme.


  1. What are the problem that the pensioners have during the collection of their pension?
  2. To what extent does the pensioners receive their pension as they are supposed?
  3. To what level does the government know about the problem?



Government are working hard to see that retirees receive their pension regularly and when due. The specific objectives are :

  1. To examine the problem that the pensioners have during the collection of their pension
  1. To investigate the extent the pensioners receive their pension as they are supposed
  2. To examine whether the government know about the problem.


Since it is a known fact that most states with management of pension scheme makes provision for widow whose husband died after the completion of the minimum period of qualifying service, it is an aspect of importance of the study.

Again the children of the late civil servant are also entitled to some benefit, a maximum of 1/9 of the civil servant final salary through the pension ordinance. Also pension scheme is important in the sense that a civil servant is entitled to some benefit after retirement from service, it is also done through the pension ordinance.

The study will motivate the management of pension in Nigeria with a particular reference to the department of pension and establishment Enugu North to increase pension as a result of problems associated with pensioners.

Moreover, this study will highlight the need for re-organization of the pension scheme with a view to adopting more dedicated and national approach, in order to avoid the incessant verification and identification parades which has lead to the sudden death of pensioners while wanting to collect their pension.

The study will also proffer solution on how to stop the nefarious situation in which almost everyone in government think of how best he can embezzle public fund while he can rather than wait for an ingrate future administration to take care of them, their limbs and muscles would have weakened.

The study will also address the issue of abundment of pensioners and military veteran who served the country of their old age when they richly needed our love. Support and above all respect, it also helps to broader ones knowledge base. The studying of management of pension scheme in Nigeria gives the researcher the opportunity to widen his/her knowledge on this particular research problem. It enables one to have a deeper insight into the problem under investigation.


The scope of the study on management of pension  schemes in Nigeria public service and life after service  is narrowed down Enugu metropolis.

Furthermore, this study was centered on effectiveness and efficiency in the management of pension as well as appropriation of pension funds to the pensioners.


In the course of writing and carrying out this project work, the research encountered many difficulties; some errors in the results of the research and from external sources of data collection. These are factors  standing as constraints thereby limiting the effect of the research result.

Among these are, time finance , scope and use of wrong statistics in data analysis, due to time limit, the research work is a time consuming one. A lot of time is taken to observe the subjects.

Most  times the behaviour of the staff changes even when they are aware that they are being observed by the researcher, this is by taking their behavior. The researcher also observed that these senior staff some time give true and false information in order to cover their branches.

At sometime the research work lasted over two months due to large scope of area of the study.

However, I overcome the limitations through the use of secondary source of data collection, they are as follows: Internet, Newspaper, Textbooks and Library.



DECREE: There are law-made by a despot. It is the way of making laws in military government. The law made by the highest ruling body during a military regime are as decrees.

 DIMINISHING RETURNS: The law of diminishing return states that as more of a variable factor of production is added to a fixed supply of land. A point will reach when average output will diminish. This necessitate the retirement of old sapped workers to make room for the younger generation.

LEAD OF SERVICE: The head of services is the most senior civil servant in the country. He is at the head of the federation.

MAN/HOURS: Man-hour means a work divided by the working hours which is a system of measurement used to calculate the output.

MANAGEMENT: Management is the process of combine of allocating an organization  input (man material and money) by planning, organizing, directing and controlling for the purpose of producing output which could be in the form of goods and services so as to attain organizational goals (Akpala: 1990:3).

ORGANISATION: An organization is the working together of two or more people in a set of objective to arrive at a goal (stone:1992:4).

PENSION ACT: The pension act is the enabling laws of the federal republic of Nigeria that brought the pension scheme into existence. The enabling act is decree 102 of 2009.

PUBLIC SERVICE: Scheme 20 of decree 102 of 2009 listed all the organization decreed as public service. The public service is government establishment that include statuary co-operation and the civil services.


This research work is organized in five chapters, for easy understanding, as follows. Chapter one is concern with the introduction, which consist of the (background of the study), statement of the problem, objectives of the study, research questions, research hypotheses, significance of the study, scope of the study etc. Chapter two being the review of the related literature presents the theoretical framework, conceptual framework and other areas concerning the subject matter.     Chapter three is a research methodology covers deals on the research design and methods adopted in the study. Chapter four concentrate on the data collection and analysis and presentation of finding.  Chapter five gives summary, conclusion, and recommendations made of the study


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