Global Journal of Interdisciplinary Social Sciences

Abstract

Management of Pension Schemes in Africa: Nigeria’s Experience, Challenges, and the Way Forward

Ovbiagele, Abraham Otaigbe

In Nigeria the pension scheme that were operated before the Pension reform Act, 2004 did not meet the objective of ensuring pension payment as and when due. This Act established the new contributory pension scheme. In the new scheme. contributions are sent to Pension Fund Administrators (PFA’s) for the credit of employees’ Retirement Savings Accounts (RSA’s). Credits in these accounts are invested and used to programme employee’s monthly pension payments at retirement. Two hypotheses were formulated. The research assessed the level of compliance by employers with the new scheme, investment of the pension funds and general level of awareness. The hypothesis tests showed that employers’ level of compliance and workers level of awareness are low and that investments of pension funds have not started to yield fair returns. The study recommends amendment to the Act for more severe penalties to be imposed on erring employers, inclusion of contributors from the informal sector and increase in the rate of contribution from employers. It also recommended that investment should be in less risky financial assets and that more sensitization campaigns should be embarked upon to raise the level of awareness of the scheme.