The Pension System and Retirement Planning in Nigeria

Abstract

Over the years the management of pension scheme in Nigeria has been inundated by multiple and diverse problems arising from which retirement became dreaded by workers especially in the public service. The failures of pension schemes in the country have been attributed to poor pension fund administration, outright corruption; embezzlement of pension fund; inadequate build-up of funds and poor supervision. There have been several reviews of pension schemes by the federal government which have also caused implementation problems. In 2004, Nigeria established a funded system based upon personal accounts. This paper examines the features, prospects and challenges of pension management in Nigeria as an important aspect of retirement planning almost a decade after the commencement of the new reforms. It gives an overview of the scheme and identifies key problems facing pension scheme in Nigeria and proffers solution. Data was obtained from official publications, documentations, paper clippings and internet services. The paper concludes that there is not much evidence to show that the pension scheme is leading Nigeria in the desired direction. Numerous scandals have trailed the pension scheme, and a lot still needs to be done with regard to the effective management of the pension scheme. The importance of pension provision will continue to grow as individuals begin to place less reliance on family to look after them in old age and begin to face the reality that they need to look after themselves. The success of the pension reforms largely depends on the sincerity, collaboration and commitment of all stake holders.

DOI: 10.5901/mjss.2013.v4n2p25