LITERATURE
REVIEW
This chapter
will focus on identifying and reviewing previous closely related studies on the
problem under investigation. Thus, the relevant and related literature on the
problem under study and indicated on the management and administration in
Nigeria Local government System will be thoroughly reviewed, because an
academic research project is a cumulative enterprise.
According to
Luckman (1992: 288-289) the purpose of the literature review is to expand upon
the context and background of the study, to help further define the problem and
to provide an
empirical basis for the hypothesis.
In tandem and Tuckman’s assertion, the researcher will
review previous studies that are closely related to challenges of pension
administration in Nigeria Local government System and indeed a study of Ebonyi
State imparticular for maximum empirical and theoretical benefits.
OVERVIEW: Until the present time the issue of
pension made in news or had any serious attention and
interest of many writes and as a result, no much work has been done in this
regard, particularly in Ebonyi State.
The Local point
here, is pension and gratuity which is synonymous with retirement and old age.
S.A.U Osuagwu:1997 saw pension as a promise of an employer which he grants his
employee after retirement and gratuity as a lump sum payment usually granted
immediately upon the retirement of officer.
We shall proceed
to discuss other writers views on retirement for the purpose of perspicality.
Robert C. Ashly:1981 States that the process of retirement involved the
transition people experience when they move a job role performed for pay to the
role of a retired person.
Peter O.
Morakingo: 1996 sees pension as a period when the major focus of life and
living one self preservation and self esteem in consonance with self
actualization or the achievement of what gives measuring to life ultimately.
People
especially in Nigeria appear have negative feelings about retirement is a
difficult, often negative experience seems wide spread, as Evelyn Easton White
head and James D. White head: 1983 state pension is not a harmogenous
experience. For each individual what it will mean to retire will dramatically
affected by health, family, situation, inters and skills, gender and social
class and by the money on which one will live.
It is observed
that while these individuals differences remains, these are similarities and
trends that are important as well. There is evidence that the 19505 in America
wage earners and salaried workers who had the option to retire at sixty five
years of age before were increasingly choosing to do so, but during the 19805
in Nigeria. People were considering early retirement because many forced into
prepared for retirement Amos Omore:1987. In developed countries, retirement the
choice of most people but round about the 19705 the word retirement experienced
and expressed about.
Retirement tend
to inhabit the flexible response to the real requirement choice of how one’s
post retirement years will be lived. Evelyn Whitehead and James White head:
1983 suggested that retirement should not catch a person totally unwanted use
the term “rehearsal for retirement” to refer to how people shall prepare for
year of retirement.
Chris Ogbonnaya:
1995 threw the picture on how anxiety and concern are always exposed on the
face of a workers leaving employment either when family through retirement or
involuntarily through retirement.
Bernice
Navgation: 1975 reveals the trend of health looking retired men and women who
still show affluence and equally vigorously participated in social and Civil
life. The above is further corroborated by this statement ____the attitude and
life experiences of these young ___ old life contradict the negative expections
of their retirement as a time of disintegration and disengagement. Evelyn and
James White head: 1983.
Retirement
should be seen as a time of significant transition or change in the matter of
living arrangement and other though provoking question James B. asbook: 1975
states: transition makes the sharpness of the ageing process. Yet transition
characteristics every age: from the womb to the world from the home to the
School: from the School to the work: from the living with one’s natural family:
from seeking to become settled in: from many involvement to fewer involvement:
from middle age to later matanity and to old age. Transition anticipated,
remembered, known, experienced, feard-distiguished events from the orgoing.
The awareness of
change symbolizes our peculizing human predicament.
To be retired is
to be old, at least as society seas it one of the challenges of retirement
experienced is to come to terms with
what it means to be identified as older person. Many retired persons have a
healthy resisted once to being indenfified as old. Evelyn white head and James
white head: 1983. Omoreseni: 1987 spolyghted the strange experience in the
middle state of retirement transition which involves, disorientation and
enxiety and stated that a retired person will find a satisfying way to live.
This name experience and to confrecate to the community and to enjoy leises
without feeling guity.
Naturally to
come for the young generation without middling and to find a new indications of
personal value and work a part from social and economic productivity.
About 80% of
peopsioners and responsibility to attend to financially and might want to make
some investiments to make ends met. Ola, C.S: 1994 opined that before
retirement, one must take stock of his present wealth to project into the
future and must work out what ones income and expenditure are likely to be on
that project. It is advisable to fund that project before going on retirement
and work out how long it will take to make viable.
In consideration
of all it takes to retire, government therefore has to prepare and manage the
administration of pension both at the government level and the manage of
individual retire.
U. Udoka: 1977
stated that it is in adviable for any one to purchase a business about which he
or she knows little, unless he has a satisfactory linecip of management staff
organized for its continued viability.
Pension
administration has finance its. Main focus and the problems interest in all
financial and administration control fund is applicable to pension
administration as Oguonu Chika N. 1977quites God Oworoli in identifying
management of finance is profit maximization while according to Raymon E. Owen:
1983 financial management in the public sector entails a specialized bureabatic
attempt to mange money so as to accomplish certain objective.
Public financial
management equally search for precision and efficiency adopting techniques of
decisions in routine fashion as carbult, Douglas: 1971 sees financial
management in the public sector as the management the deals with the flow of
funds in an establishment. It can be described as the making of decision or
financial matters facilitating and receiving their execution.
It should be
borne in mind that administration is some what targeted and this applies to the
process by which a particular policy or programme distributes fund to help a
particular group or class.
2.1
pension
reform Act 2004: The pension Reform act 2004 is a paradigin shift in the
management and administration of person in Nigeria (Moses, 2007). The policy
frame work of pension payment in the past based on the pension Act 1979 was
based on the defined benefit scheme where government took the responsibility of
providing totally for the pension of her employees. However the pension Reform
Act 2004 policy’s frame work is based on the defined contribution scheme which
makes the manifestation of abuse of office by government officials dishonest,
unethical behaviour disrespect to the law, favoritism, in drawing up policy
proposals, gross inefficiency covering up mistakes and failure to shower
initiative.
With these
inherent problems loose stated above, we should not management is all about
especially in government business.
According to
C.S.Nwoko: 1990 “financial management is an aspect of management and is
enssencially concerned with planning and control of the resource of a firm or
an establishment with a view to the attainment of set objective”.
The financial
management of pension fund is strictly governed and guided by elaborated rules,
regulations and guide lines. The most important among these is the degree 102
of 1979 as contained in the official Gazette extraordinary No.48, Vol. 68,
1979. The general outlay of financial management in the public sector is quite
different from what obtained in the
private sector. In the private sector, employers and employees contribute
monthly a certain amount towards the pension of the employees (section 9
(pension return Act, 2004, Act prescribes a minimum mandatory contribution rate
of 75% of an employee for all salary by the employee for all organizations that
employ five or more persons except the military where the minimum contribution
rates are 120.5% by the employer and 2.5% by the employee.
Apart from the
technical issues of the new pension is to be administered as contained in the
Act, the pension Reform 2004 in section 14 (1) established a regulatory body to
Oversea the implemention of the provision of the Act. The section states that:
there is a established a body to be known as the National pension commission
(in this Act refered to as the commission.)
This commission,
which also refered to as pension for short, in empowered by the act to under
take various responsibilities. The roles of Reform, its powers, composition,
functions and its challenges as thus relate to the new era of pension
administration in Nigeria are examined with a view to providing suggestions for
its reform in order for it to achieve its objectives efficiently.
Despite this Act
pension programmes in Nigeria has generated lot of problems and concern both
locally and abroad. With elderly people queing for long hours and some dying in
the process for just their widows-mite which these are entitled to after
spending their active life in the service of their various organizations or
establishments, it become necessary to examine the laws that governed pension
administrations and home up with recommendations that would ensure prompt
payments of pensions and also advocate for provisions of adequate funds for
such payments I order to forestall the erratic and irregular payments problems.
The pension reform Act, 2004 (“the Act”) was passed into law on the 25th
June 2004 by the national assembly, repealing the pension Act, 1979 and
amending the NSITF Decree of 19993 to achieve the set objectives.
Although the reform remains a very
positive move to ensure that
B Data gathering
challenges among the function of the commission it is required to maintains a
data bank for pension matter in the country. This is an enerous-challenges for
the commission in a country with scanty data-infrastructure and inefficient
electrical facilities and a thriving civil service population-over 260,000 of
them (work bank 2005) coupled with other personnel –such as the military, and
ghost workers problems, managing data gathering and regulation at the same time
may be quite a challenges for the commission .the reform also requires that
many employees with 5 or more staff can join the scheme thus according to the
world bank (2005) membership from the informal sectors is not million. Pension
as of today does not have capacity to deal with that number.
© Enlightment
problems
as noted earlier many workers are
not aware about the commission‘s activities and duties. Also many employees and
employers likewise do not understand the provision of the pension reform
Act,2004, its implications and obligations. There are also some ambiguities in
that act that needs clarification like: questions as to pension in nigreia are
effectively administered, the system of oeration and even the act still posses
some challenges.
Give this ambiguity in the
literature especially theoretical studies it seems logical to appraise the
performance of the national pension commission on pension-administration in
Nigeria local government system.
2.2
national
pension commission (pencon):Need for reform.
A composition
Issues
This is about the composition of commission. It must noted
here that most of the members of the commission are government appointees or
representatives and have its affairs would be subject to government control and
influence (Ojujoh 205). This is a challenges for the commission because the act
covers both the public sector and the private sector hence there might be no
balance decisions from the commission
especially with regard to the private sector of the country which id supposed
to be the engine of economic development in the country.
Whether
expatriates are covered, transfer of old schemes and fax-status of payments
made from old schemes other include the lack of specific minimum percentage of
renumeration that must be repented by the components of environment defined as
basic housing and transport allowance. It is the job the commission to educate
the members of the public on these issues. Doing this is a daunting task which
a lot of zest and courage.
D) Monitoring
and transitional challenges:
The Act took effect in 2005 without
any period of adjustment from the old provision: This is a challenges for the
commission because it takes time to learn and master a new system. Most of the
licensed P F A’s and custodians would challenge the commissin in terms of law
their affairs are monitored and evaluated. Also the commission roles although
spelt out by the Act would fasted by the reality pf pat ice. The issue of contribution
evasion is a paramount challenge be because some employers would want to evade
the scheme by not been registered or not register all of their employees
portraying some as contract workers or belonging to other categories that be
considered as non-workers (oyedde,2007).
Also implementing sanctions to
erring agencies by the commission would bring out whether the commission is
actually internally strengthened to deliver the needed oversight function it is
man dated by the to perform.
2.4 pension scheme
and related issues:
guideline on the management and
administration of pension schemes the public service reflect the nature and
type of schemes that exist. Thus the guidelines for managing the schemes in the core civil service are
different from those for managing g the schemes in the parastatals. The core
civil service schemes has the selt administered type of pension scheme. It is
non-contributory and it is not funded: it is the office of establishment the
civil service scheme, instead of pension board of trustees as in the case of
parastatals.
Its management and administration of
the scheme are guided by the pension laws and other government plices which are
announced from time to time in it is selt administered.The above is as it is
contained in the review of the management pension schemes of parastatals and
other organization funded by the federal government pen, 921/5.28/195 of 30th
January 1997.
2.4.1 Scheduled
service
the scheduled serice or authority is a public
service item listed in scheduled 2 decree No102 of 1979. it applied to
organizations which operate schemes-comparable to the civil service pensions as
approved in the Act. An officer may be
transferred from the public service of the federation to a public scheduled
service of from or from a scheduled service to the public service of the
federation and from one scheduled authority to another and yet retains the
benefits of the contimity of service for pension purposes.
Classification as scheduledservice
are government oened agencies, statutory co-operations, companies parastals and
commissions. For an officer to retains thebenefit of continuity of service for
pension purposes, movements between scheduled organization in the public
service must be by formal transfer and not by resignation. The need for
organization or quas-government bodies to be establishment:- cicculars. Two
types of retirement benefits schemes have been adopted by parastatals at the
federal level. These insured and self-administrate red schemes.
An insured schemed is the type that
directectly administrate red and managed by an under writer, it involves the
regular payment of premiums to the insures. The premium varies are determined
by an actually on the basis of a number of factors, such as the level and form
of benefits, the number and length of service of staff.
The investment of the funds of an
insured schemes is subject to the insurance Decrees No.2 of 1997 and the
self-administered scheme on the other hands, it is one administrate red and managed
by the trustees of the fund. The responsibility of investing the funds of the
scheme and the day to day running of the scheme rest on them.
However, the Ebonyi State Local
Government staff pension board is the categories and form of parastatals whose
pension scheme are equal non-contributions and not funded, it adopted the board
room approach in the management and administration of the scheme.