CHAPTER ONE

INTRODUCTION

I.0 Introduction

A pension is a contract for a fixed sum to be paid regularly to a pensioner, typically following retirement from service. It is different from severance pay because the former is paid in regular installments while the latter is paid in one lump sum. A pension plan created by an employer for the benefit of employees is commonly referred to as an occupational or employer pension. Labour unions, the government and other organizations also fund pensions. Occupational pensions are a form of deferred compensation, usually advantageous to employee and employer for tax reasons. Many pension plan also contain an additional insurance aspect, since they often will pay benefits to survivors or disabled beneficiaries. The common use of the term pension is to describe the payments a person receives upon retirement, usually under pre-determined legal and/or contractual terms. According to Adams (2005) pension is the amount paid by government or company to an employee after working for some specific period of time, considered too old or ill to work or have reached the statutory age of retirement. It is equally seen as the monthly sum paid to a retired officer until death because the officer has worked with the organization paying the sum. Adebayo (2006) and Robelo (2002) asserted that pension is also the method whereby a person pays into pension scheme a proportion of his/her earnings during his working life.

The contributions provide an income (or pension) on retirement that is treated as earned income. This is taxed at the investors marginal rate of income tax. On the other hand, gratuity is a lump sum of money payable to a retiring officer who has served for a minimum period of time. A greater importance has been given to pension and gratuity by employers because of the belief that if employees' future needs are guaranteed, their fears ameliorated and properly taken care of, they will be more motivated to contribute positively to organization's output. Similarly, various government organizations as well as labour unions have emphasized the need for sound, good and workable pension scheme. To manage pension effectively there is need to manage the payroll with the use of automated systems.

- Scope of the Study

This study covers the design and implementation of a pensioners payrolling system a case study PENCOM Uyo.

1.5 Significance of the study

The significance of the study is that it will provide a more effective and efficient system for PENCOM to facilitate the capturing and computation of pension payroll records so that it will be easy to retrieve needed information pertaining to pension payroll. It will also serve as an information system to the management of the organization. The study will also be useful to other researchers seeking related information.

1.6 Organization of Research

This research work is organized into five chapters. Chapter one is concerned with the introduction of the research study and it presents the preliminaries, theoretical background, statement of the problem, aim and objectives of the study, significance of the study, scope of the study, organization of the research and definition of terms.

Chapter two focuses on the literature review, the contributions of other scholars on the subject matter is discussed.

Chapter three is concerned with the system analysis and design. It presents the research methodology used in the development of the system, it analyzes the present system to identify the problems and provides information on the advantages and disadvantages of the proposed system. The system design is also presented in this chapter.

Chapter four presents the system implementation and documentation, the choice of programming language, analysis of modules, choice of programming language and system requirements for implementation.

Chapter five focuses on the summary, constraints of the study, conclusion and recommendations are provided in this chapter based on the study carried out.

7 Definition of terms

Accounting - the activity, practice or profession of maintaining the business record of a person or organization and preparing forms and reports for tax or other financial purposes.

Gratuity: A reward, service or payment provided freely, without obligation.

Payroll - A list of employees and their salaries or wages.

Pension: A gratuity paid regularly as benefit due to a person in consideration of past services; notably to one retired from service, on account of retirement age, disability or similar cause.

DESIGN AND IMPLEMENTATION OF A PENSIONERS PAYROLLING SYSTEM

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