Home VOL. 4 (2018) Obstacles Hindering Effective Implementation of the Contributory Pension Scheme in Nigeria:  The...

Obstacles Hindering Effective Implementation of the Contributory Pension Scheme in Nigeria:  The Way Forward

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Abstract

The contributory pension scheme was first introduced in the country in 2004 to address the problems that had bedevilled the operation of the defined benefit scheme, particularly in the public service principal amongst which, were poor funding and endemic corruption. The innovations introduced under the contributory pension scheme included lessening the employer’s responsibility for funding the pension scheme by imposing part of that burden on the employee and removing management of the fund contributed under the scheme from the control of government. However, more than a decade after the introduction of the contributory pension scheme, its effective implementation across the federation has continued to be hampered by the same core problem that assured the failure of the defined benefit scheme namely poor funding. It is argued that the provisions of the Pension Reform Act 2014 and the extant State Pension Reform Laws are adequate to guarantee the success of the contributory pension scheme if they are implemented and enforced according to their letters and spirit. Government being the largest employer of labour in the federation must demonstrate greater and sincere commitment to the performance of its financial obligation to contribute toward the scheme to the extent prescribed under the Pension Reform Act, 2014 and relevant State Pension Reform Laws.

Authors: Z. Adangor