ABSTRACT 

The main purpose of this write-up was to determine the impact of pension reform Act 2004 on the Image of pension Workers in Nigeria. The pension Reform Act 2004 was characterized by some problems like non-compliance, ignorance of the benefit of the pension reform act 2004 which has hinder the smooth administration of the reform act. The major findings of this study were the fact that pension is a series of benefits provided by government or former employer to a person who has come to end of his working life and that the existing pension prior to the enactment of the pension reform act 2004 was characterized by indebtedness and so was seen effective. The conclusion of the study show that despite the problems faced by the reform act that if the reform act is given full time to manifest the reason beyond its enactment that it will boost the image of pension workers and pension business in Nigeria and will be of benefit to the citizenry of the state and also bring about economic growth and development of the nation.

1.1 Background of the study

Currently a number of studies have been carried out on the impacts of pension reform Act 2004 on both the image of pension business in Nigeria and the entire workers in Nigeria. However, much have not been discourse about impact on the new pension reform act 2004 will bring on the image of pension workers in Nigeria. Pension natural can be described as a sum of money paid regularly to a person who has come to the end of his normal working life or it can be defined as a series of regular payment provided by government or former employer for a person who has come to the end of his normal working life or who no longer works because of age, disablement etc or to his widow or defendant children by the state by his former employer as or from funds to which he and his employers have both contributed. Thus, the introduction of the pension reform act 2004 was due to inability of the previous pension system to meet the need of the people. As people grow old they work, produce, and earn less and therefore need a secure source of income to see them through their lifetime. To this extent societies and governments have developed mechanisms to provide income security for their older citizens as part of the social safety net for reducing poverty. No doubt, these arrangements should be a source of concern for everyone - rich as well as poor, young as well as old - because the arrangements adopted can either help or hinder economic growth (World Bank, 1994). Pension has been a common global discourse in the contemporary literature. The past decade has brought recognition of the centrality of pension systems to the economic stability of nations and the quality of life and longevity of their workers after retiring from active service (Holzmann and Hinz, 2005). This notwithstanding, there has been an emergence of what Barr (2006) called 'a pension crisis' caused by high and rising pension costs which has created worries. In fact, the global trend is a total paradigm shift towards definite and fully funded contributory schemes. In most countries pension plans are defined benefit plans financed on a Pay-As-You-Go (PAYG) basis, through pay roll taxes that can be adjusted periodically to ensure that revenues are sufficient to meet current pension obligation (Dalang, 2006). The World Bank, in 1994 published a path-breaking seminal book on pension reform entitled, "Averting the Old Age Crisis: Policies to Protect the Old and Promote Growth" (Orszag and Stiglitz, 1999). The Bank delivered its new ideas on pension systems in this landmark report which became the reference point for the Bank's approach to pension reforms. It advocated a move away from pay-as-you-go financing which has dominated pension provision in both rich and poor countries. The report backed compulsory funded pensions, and paid for by workers saving part of their earnings in retirement accounts. Since1994 the Bank has been involved in pension reform in more than 80 countries, and provided financial support for countries to grow. According to the Bank, the main objectives of pension systems are: poverty alleviation, consumption smoothing from one's work life into retirement and the broad goal of social protection. Consequently, reforms along these lines have been carried out mainly in Latin America and the post-Soviet "transition countries". Chile was the first to embark on the reform as early as 1981. In all, twelve countries in Latin America have passed laws introducing mandatory savings; ten have implemented them. In Europe and Central Asia, fourteen countries have decided to introduce individual accounts whilst ten actually made the change (Dalang, 2006; Holzmann and Hinz, 2005). After a critical assessment of the various pension schemes of the various countries, the World Bank on 21st February, 2005, released a new report titled "Old Age Income Support in the 21st Century": An International Perspective on Pension Systems and Reform". The report emphasized the need for change as most pension schemes in the world do not deliver on their social objectives. Pension schemes create distortions, impose marginalization, old age poverty, post retirement sufferings and ultimately lead to untimely death. Above all, they distort market economies and are financially unsustainable because they are expensive to run and the process fraudulent even by those mandated to administer the pensions (Asuquo, Akpan and Tapang, 2012). In an attempt to reposition pensions, the report stated that any pension reform should consider:

i. The informal sector which incidentally makes up for more than half of the labour force

ii. Catering for people who will be poor throughout their lives, and

iii. Those that will be physically challenged

In 1996, the International Development Targets (IDTs) were set to improve economic well-being, social and human development and ensure environmental sustainability and regeneration in readiness for the fight against poverty in the emerging Millennium. In September, 2000, 149 world leaders adopted the United Nations Millennium Development Declarations which its fundamental values bind countries to do more in the realm of human development. Part of the mandate was to 'halve the proportion of people whose income is less than one dollar a day and who suffer from hunger'. Emerging from the Millennium Development Declarations are Millennium Development Goals (MDGs), which are a set of specific, qualified and time-bound targets on the various dimensions of human development - income, poverty, hunger, health, education, gender, equality, and environmental sustainability. Their importance for the global community is exemplified by their increasingly becoming the driving force for development policy internationally, the means for productive life for the billions plus people living in extreme poverty as a way to secure a peaceful world for all (UN, 2013; NEEDS, 2004). Income security in old age is a worldwide problem, but its manifestations differ in different parts of the world. In Africa and parts of Asia, the old make up a small part of the population - and have long been cared for by extended family arrangements, mutual aid societies, and other informal mechanisms. Formal arrangements that involve the market or the government are rudimentary. But as urbanization, mobility, wars and famine weaken extended family and communal ties, informal systems feel the strain. That stain is felt most where proportion of the population that is old is growing rapidly, in consequence of medical improvements and declining fertility (Word Bank, 1994). Agreeably, in Nigeria, old people were cared for through the extended family system. The aged had the opportunity to live with the children and younger relatives who provided him with his needs. Today, the story is different because the society is dynamic. There has been dislocation in the societies set up brought about by rural-urban migration of youth and young people in search of white collar jobs. The demographic changes have affected the traditional parent-offspring relationship. They now live in very distant locations apart from one another. Western civilization made it possible for people to seek for paid employment in urban cities which sometimes are far away from their villages. The evolution of paid employment precipitated the concept of pension. The idea is that since workers spend the whole of their productive lives working for their employers, they (employers) in turn should, of necessity, make adequate plan for the up-keep of their workers after they retire from active service.

1.2 STATEMENT OF THE PROBLEM

The issue of receiving retirement benefits is becoming increasingly a nightmare to the Nigerian 'senior citizens' (retirees). Life after retirement is one of the dreaded periods of most workers in Nigeria. The fear of uncertainty after retirement is also responsible for age falsification among civil servants in Nigeria. Retirement in Nigeria is now synonymous with deprivation and suffering. Most often gratuities and pensions are not paid as and when due, consequently, retirees cannot afford three square meals a day, let alone paying school fees for their children, pay house rents or take care of other necessities of life (Global Action on Ageing, 2006). It is observable that most often a number of these pensioners die without accessing their entitlements. In a bid to make ends meet, retirees even at very old age look for employment or jobs. Although the pension industry has witnessed series of reforms since independence, the implementation has not actually made any significant impact in the welfare of the beneficiaries - pensioners. This is because pension administration in Nigeria is poorly handled. The problem with Nigeria is that most of its laws are only good on the paper. Nigerians are recently projected globally in very bad image because of scandalous and startling revelations of massive looting and fraud masterminded by serving civil servants against their former colleagues who had left service. A staggering amount running into inestimable trillions was looted from pension funds by the stakeholders in the administration and management of pensions (Gbenga, 2012; Emewu, 2012). This was just one out of many of the massive looting and "scramble" to empty public treasury. The fraud is not only in pension funds, it is also obtainable in the entire public service. It is only in this era of societal decay and deadly quest for materialism that "a rat can conveniently eat the fish hung round its neck". It is only in today's Nigeria that public servants embezzle funds in their custody without adequate punishment. The institutionalized procedures for sanctions against fraud are treated casually as mere rituals. These precipitated neglect in the administrative accountability and transparency in daily activities of public servants.

1.3 OBJECTIVE OF THE STUDY

The objectives of the study are;

1. To determine whether the problems of the old pension scheme affected the welfare of pensioners

2. To ascertain whether the implementation of the Pension Reform Act 2004 has enhanced the pensioners' welfare.

3. To find out if the institutional framework for the implementation of the Pension Reform Act 2004 is effective and efficient in delivering pensioners' welfare

4. To suggest possible measures for effective implementation of the Pension Reform Act 2004.

1.4 RESEARCH HYPOTHESES

For the successful completion of the study, the following research hypotheses were formulated by the researcher;

H0: there are no problems of the old pension scheme affected the welfare of pensioners

H1: there are problems of the old pension scheme affected the welfare of pensioners

H02: there is no implementation of the Pension Reform Act 2004 has enhanced the pensioners' welfare

H2: there is implementation of the Pension Reform Act 2004 has enhanced the pensioners' welfare

1.5 SIGNIFICANCE OF THE STUDY

The study has both theoretical and practical significance. From the theoretical view point, the study has theoretical significance for productivity theory of pension as propounded by Dorsey; Cornwell and Macpherson (1998), and The Theory of Prismatic Society, by Fred W. Riggs, 1964 in (Onah, 2008; Ezeani, 2005; Okoli, 2004; Kasfir, 1969). The productivity theory of pension has two sides: demand and supply sides. The demand side of the theory posits that employers make payments to employees' pension funds because workers are keen or prefer pension savings to cash payments to their emoluments because of the benefits attached such as reduction in income tax, retirement benefits, annuity etc. The supply side of the theory posits that employees' gain from pension tends to raise the level of workforce productivity and reduce labour costs. This is because employers tend to invest adequately in the training of workforce, improved condition of service, provision of adequate resources, etc., that are greatly offset by the workforce's improved output or productivity, workers retention, which are inherent in defined benefit pension scheme. The knowledge of this theory will help the employers and implementers of the pension Act to acknowledge the fact that the enactment of the Act is as important as its implementation and that for this well-designed pension plan to deliver on its policy outcome this theory must serve as a reference point by all the stakeholders and must rise up to the inherent challenges. It is also expected that the knowledge of this theory will help contributors and pensioners to develop confidence in the pension scheme.

1.6 SCOPE AND LIMITATION OF THE STUDY

The scope of the study covers pension reform act of 2004 analysis of its impact on Nigeria workers. The researcher encounters some constrain which limited the scope of the study;

a) AVAILABILITY OF RESEARCH MATERIAL: The research material available to the researcher is insufficient, thereby limiting the study

b) TIME: The time frame allocated to the study does not enhance wider coverage as the researcher has to combine other academic activities and examinations with the study.

c) Organizational privacy: Limited Access to the selected auditing firm makes it difficult to get all the necessary and required information concerning the activities.

1.7 DEFINITION OF TERMS

PENSION: A pension is a fund into which a sum of money is added during an employee's employment years, and from which payments are drawn to support the person's retirement from work in the form of periodic payments

PENSIONEER a person who receives a pension, especially the retirement pension