Public sector pension financing scheme is made to provide financial support beyond retirement age or death or appropriate circumstance voluntary withdrawal from service. The objective provides some measure of security and guarantee to the public sector workers in the country. However, there are some problems that militate against the smooth running of the scheme. These




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After payment, text the name of the project, email address and your names to 08064502337 problems have been compounded by the inability of the workers to save out of their take home pay because of hyper inflation, economic recession and high cost of living. Both the federal and state government has not been carried on how these people (pensioners) are coping with this issue. Again this research work tries to examine the financial operation of pension scheme which based on the assumption that the funds will accumulate to an extent sufficient to make possible the payment of the promised benefits. Therefore if and only if those responsible for the disbursement and management of these funds have the necessary skills, positively in the desired sectors of the economy and for the success of this pension reform depend on the full participation and co-operation of all stake holders especially the workers. It is also believed that a sound and effective pension fund administration will double a good standard of living for retiring workers and also ensure some level of economic development. Six research questions guided this study. Also three hypothesis were tested and it was found that public sector pension financing scheme could attract skilled workers to the public sector organization frequency tables, percentage mean and standard deviation were used in representation and analysis of the responses to test the hypothesis. And finally investment of public sector pension fund on viable productive activities were found to contribute to the development of the country’s economy. Also it was recommended that government should ensure that personal data of all employees are collected and kept to guard against the problem of incomplete record of service.




The problem and prospects of public sector pension financing scheme have been agitating the minds of most workers of the country in particularly in public sector of the economy. In view of this pension fund is quite neglecting for the reason the researcher have taken up topic with a view of finding out the problems of financing pension scheme and the possible prospect in pension scheme. The provision and administration of retired benefits through pension plans and gratuity plans. These plans may be called “long term or end of service benefits”. These scheme or plan provides financial support beyond retirement age or death or inappropriate circumstance voluntary withdrawal from service.

While the United Kingdom Civil service pension scheme started as far back as 1884, that of Nigeria could be traced to the colonial era when she was under British colony. The first significant step to have a pension fund scheme was taken in 1st of January, 1946. The pension ordinance was later promulgated in 1957 and since then have been series of amendments.

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By then, it was only government establishment that had pension arrangement and was wholly founded by the government on level contributed basis. Some of the corporation that were among the early beneficiaries are the Nigeria Railway Corporation (NRC), the Nigeria Authority (now Nigeria Port Authority plc) after its merger with the Nigeria Port Authority.

Authority for private sector pension scheme (i.e provident fund and now Nigeria social insurance Trust funds) is not within the scope of this study mentioned and could be made of it from time to time for the purpose of clarity and better understanding. These have been on increasing awareness and recognition of the need for pension plan by private sector employers for their employees.

The youths in the labour could no longer provide for their aged parents and this is as a result of depreciation in the purchasing power of the Naira. According to African tradition, the aim to provide a measure of social economic security of old age has remained one of the major pre-occupant of men throughout the ages.

However, with increasing urbanization in the societies and greater geographical mobility of labour changes in the housing condition and socio-economic development, the traditional approach to old age care and support is every one to himself and God for us.

In addition to this, both the federal, the state and local government are showing some concern about the plight of workers and pensioners; this is evident in the various instruments by the government such as the pension Degree of 1979, the income tax Act of 1961 and the companies income tax of 1961 and 2004 Act. All of which contain provision that affect the operations of staff retirement benefits scheme.

Compared to anything, the most important accomplishment of the President Olusegun Obasanjo’s administration is the introduction of the 2004 pension Reform Act. That if all stakeholder plan out their duties as expected, the impact of the pension Reform will encourage the economic reform programme presenting under was or any being contemplating.

Just imagine, it is estimated that a sum of approximately 600 billion Naira will be pumped into the Act of 2004 in the country some sectors that will be impacted positively are the loan and mortgage industries. But these benefits will only be realized and felt by the ordinary citizens in the country, if and only if those responsible for the disbursement and management of these funds have the necessary skills, positively in the desired sectors of the economy. And for the success of this pension reform depend on the full participation and co-operation of all stakeholders especially the Nigeria workers. The act of 2004 here referred to as the act established to make sure that body charged this homogenous task is the Pension Commission of Nigeria referred to as (PENCOM) and it’s headquarter in Abuja. They are now the only body legally responsible for all matters concerning the regulation and over sight of pension in the country and these act cover the workers of federal public service, the various aimed service and the federal capital territory.

These problems have been compounded by the inability of the workers to save out of their take-home pay because of hyper inflation, economic recession and high cost of living. Increasing rate of worker retrenchment of the government establishments are also a contributing factors. Based on the above unhealthy development therefore, it has become increasingly necessary for the pension scheme to be appropriately and promptly financed by the contributors or the bodies concerned.


Nevertheless, the various method adopted in combating these financial problems have evolved through the years into the present days pension scheme.


In view of the high growth rate of retired public servant with the corresponding increase in the amount involved in pension financing management and administration of pension scheme become more difficult. However, the amount paid as pension benefits are usually not adequate with current cost of living. In most cases the pensioner do not even receive their benefits on time and the pension financing scheme after suffering lots of distortion due to clerical and technical problems. Consequently, the researcher will like to look at the following problems:

  1. Will the present Pension Financing Scheme (PFS) contribute to the economic development of the country.
  2. Will the pension financing scheme ensure that all necessary record of service and contribution are maintained.
  3. Will the present pension financing scheme ensure the standard of living of retired workers.
  4. Will the pension financing scheme help to remove delay of gratuity on retirement.

In view of the highlighted problems, the objective of the study are:

  1. To examine the relevance and usefulness of public sector pension.
  2. To make sure that pension benefit are paid as at when due.
  3. To make sure that all players in the pension and retirement industry play under uniform set of rules, thereby achieving a common standard of term of the administration and receipts of retirement benefits.
  4. To assist and encourage individuals to save for their golden year.
  5. To highlight the prospects for improved pension fund financing in Nigeria’s public sector.
  6. To investigate the problem being experienced by pensions from the present method of pension financing administration in Nigeria.
  7. To suggest solution to problem highlighted by the study.
  8. How satisfactory is the public sector pension financing scheme?
  9. How does lack of fund generating affect public pension financing scheme?
  10. What are the effects of financing information on the public sector pension financing scheme?
  11. What are the prospects for improving pension fund financing in Nigeria public sector?
  12. Are pensioners comfortable with the current pension financing scheme?
  13. Are workers of public pension financing scheme qualified and skilled?

At this point of Nigeria’s economic and socio-political development, a good pension scheme is needed because of the crucial role it plays in maintaining the standard of living of retired workers within a tolerable level.

Consequently, the method of financing pension and gratuity brings a proper solution to the problem of improper management and administration of pension fund scheme and determine the prospect or expected benefits to the pensioners and the society at large.


The project covers only the public sector pension funds financing, the private sector pension are exclusive from the study. There are certain constraint that was encountered by the researcher during the course of this study. These includes

  1. Time: Time was a major constraint, bearing in mind that the work had to be handled alongside with other academic requirements of the researcher and coupled with the short time required to submit this work courtesy of a very short semesters operated.
  2. Lack of materials: Lack of materials such as journals, magazine, newspapers, catalogues, textbooks etc also constitute a hindrance to the study.
  3. Finance: This was another major factor, the cost of typing and binding and other expenses necessary for the effective completion of this work to be too high.
  4. Pension fund: This is defined as any society fund contract or scheme, the assets of which are held under irrevocable trust any scheme established by law in Nigeria or elsewhere “but the main objectives which are in the opinions of non assignable and non committable retirement pension and or amenities for an individual or his dependants after his death or forcing group or class of such individual and then dependants.
  5. Scheme: This means a “Systematic plan for the provision of benefits under a legally enforcement agreement.
  • Public servant: This means federal or state civil servants, member of the armed force, employees of local government, parastatals and corporate federal and state institution of learning and research institution companies wholly owned and or with majority share participation by the federal and the state government or through any of their agencies.
  1. Retirement benefits scheme: This means a pure pension and or provident fund and or gratuity scheme under which cash sum is payable upon the exists of an employee from employment having defined condition.
  2. Benefactor: The employer of public servant and private sector employees.
  3. Beneficiaries: This means the employees and their dependents.
  • Funding Rate: This is the liquid cash that is required to provide any of the benefits mentioned above.
  • Provident fund (Nigeria social Insurance Trust Fund): It is defined as any society fund or scheme not being a pension fund, established under irrevocable or law in Nigeria or elsewhere the objectives which are the provision of retirement benefits for any group or class of individual and their dependents..
  1. Private sector Employee: It means employee of institution, companies (whether private or public as defined by the company) whose management directly or indirectly or not such institution or companies are set up as charitable organization or to make profit.
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