PAPER PRESENTED AT THE ANNUAL PUBLIC LECTURE OF THE
CHARTERED INSTITUTE OF PERSONNEL MANAGEMENT OF NIGERIA (ONDO STATE BRANCH)
TOPIC: CONTRIBUTORY PENSION SCHEME IN THE PUBLIC SERVICE: CHALLENGES
AND BENEFITS
DATE: WEDNESDAY 26TH MARCH, 2014. VENUE: BABAFUNKE AJASIN
AUDITORIUM, MINISTRY OF WOMEN AFFAIRS, AKURE, ONDO STATE TIME: 10:00A.M
BY
PETER TAI ADEDIJI, GMD/CEO, PENSIONSCOPE
PETER TAI ADEDIJI, GMD/CEO, PENSIONSCOPE
1.0 INTRODUCTION
1.1 THE CONCEPT OF PENSION
The concept
could be traced to many sources.
The all
relevant sources are related to human
The need for
some social security
Establishment
of pension scheme
Examples:
Henry VIII (of England)
Brought a kind
of revolution when he attacked English Monasteries who were hitherto very
influential and powerful.
By 1540, the
last English monastery was closed down.
The need to
make some provision in the form of pension came up especially for the monks and
nuns as they were virtually not engaged in any form of vocation that can take
care of their needs.
The Court of
Augmentations was created to administer the monastic land.
Pensions were
paid out of the proceeds of the land sold.
2.2 EVOLUTION
OF PENSION SCHEME
IN NIGERIA
IN NIGERIA
PRE-INDEPENDENCE ERA
To ensure the
interest of the colonial master.
The first formalized public sector pension legislation in Nigeria: the pension ordinance of 1951.
The Pension Ordinance was at the mercy of the colonial masters.
The first formalized public sector pension legislation in Nigeria: the pension ordinance of 1951.
The Pension Ordinance was at the mercy of the colonial masters.
POST INDEPENDENCE ERA
Due to pressure
groups and the need to satisfy many interests, the Pension Ordinance was
amended severally.
The enactment of the Pension Decrees No 2 of 1979.
The Decree established Define Benefit schemes.
Problems of DBS: Non-contributory, Depended on budgetary provision, unsustainability, lack of transparency and Poor record keeping.
The tortuous journey led to the new CPS under the PRA 2004.
2.3 WHY PENSION ‘SEF’?
Imagine a situation of no Pension at all
Pension is a way of planning for the future
Future is full of uncertainties
The concern by the moralist in the application of the Law of Diminishing Returns to employees by the Entrepreneur
OBJECTIVES OF PENSION SCHEMS
Provide earning at retirement
Retain emotional and psychological balance
Help cultivate saving culture
Increase life expectancy
Help to reduce corruption
Provide means to meet some essentials at retirement e.g. Food, Drugs e.t.c.
3.0 THE PENSION REFORM ACT 2004
3.1 AIMS AND OBJECTIVES
4.0 BENEFITS
Encourages Savings
Employment Generation
Disappearance of Ghost Pensioner from Pay roll of Pensioners
A boost to both the capital and money market- grow the economy
Payment of tax through Personal income of employees
Convenience to the retirees; just get your alert and go to your bank
Retirees receiving their entitlement adequately and promptly.
Pension liability under control; no accumulation of pension arrears
There is fiscal discipline in the budgetary process.
Development of life insurance business.
5.0 CHALLENGES
Misconception and apprehensions about the scheme.
Compliance and enforcement.
Extending the coverage to the informal sector and self employed.
Sensitization challenge.
General knowledge gap.
Lack of quality personnel to bridge the general knowledge gap.
Bringing the state and Local Government to adopt the CPS.
Combating inflation in order to ensure positive real return on savings.
Inadequate investment channels.
Taking care of post retirement risk factors.
6.0 CONCLUSION
The enactment of the Pension Decrees No 2 of 1979.
The Decree established Define Benefit schemes.
Problems of DBS: Non-contributory, Depended on budgetary provision, unsustainability, lack of transparency and Poor record keeping.
The tortuous journey led to the new CPS under the PRA 2004.
2.3 WHY PENSION ‘SEF’?
Imagine a situation of no Pension at all
Pension is a way of planning for the future
Future is full of uncertainties
The concern by the moralist in the application of the Law of Diminishing Returns to employees by the Entrepreneur
OBJECTIVES OF PENSION SCHEMS
Provide earning at retirement
Retain emotional and psychological balance
Help cultivate saving culture
Increase life expectancy
Help to reduce corruption
Provide means to meet some essentials at retirement e.g. Food, Drugs e.t.c.
3.0 THE PENSION REFORM ACT 2004
3.1 AIMS AND OBJECTIVES
4.0 BENEFITS
Encourages Savings
Employment Generation
Disappearance of Ghost Pensioner from Pay roll of Pensioners
A boost to both the capital and money market- grow the economy
Payment of tax through Personal income of employees
Convenience to the retirees; just get your alert and go to your bank
Retirees receiving their entitlement adequately and promptly.
Pension liability under control; no accumulation of pension arrears
There is fiscal discipline in the budgetary process.
Development of life insurance business.
5.0 CHALLENGES
Misconception and apprehensions about the scheme.
Compliance and enforcement.
Extending the coverage to the informal sector and self employed.
Sensitization challenge.
General knowledge gap.
Lack of quality personnel to bridge the general knowledge gap.
Bringing the state and Local Government to adopt the CPS.
Combating inflation in order to ensure positive real return on savings.
Inadequate investment channels.
Taking care of post retirement risk factors.
6.0 CONCLUSION
Hear the
conclusion of the matter:
what some
people call problems is what others
call
opportunity. Problem and opportunity is
one and the
same thing.
The Contributory
Pension Scheme is worth not
only giving a
trial; it should be embraced like a
beautiful
bride.
7.0 THE
PRESENTER
Peter Tai Adediji
GMD/CEO, Adason Group
Adason Communications
Pensions cope magazine
Pensions cope Radio
Pensions cope TV
Independent Complaint Bureau
A modern recording studio
Delight Insurance Brokers Ltd
General Insurance Broking
Life Insurance Advisors
Insurance Claims consultants
Interterms Pension Consultancy Services Ltd
Training and Workshop
Consultancy services
Peter Tai Adediji
GMD/CEO, Adason Group
Adason Communications
Pensions cope magazine
Pensions cope Radio
Pensions cope TV
Independent Complaint Bureau
A modern recording studio
Delight Insurance Brokers Ltd
General Insurance Broking
Life Insurance Advisors
Insurance Claims consultants
Interterms Pension Consultancy Services Ltd
Training and Workshop
Consultancy services
You can call me on:
08033135272, 08173037871
pta.adediji@gmail.com
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