An Evaluation of Pension Fund Administration in Nigeria.


The research work evaluates pension fund administration in Nigeria “a comparative analysis of Premium Pension Ltd and Sigma Pension Ltd as a case study.

Key problems facing pension scheme in Nigeria was identified with an overview of the scheme. Primary data were generated from direct observation and interviews granted.

Secondary data on the other hand were obtained from official publications, national dailies, documentations and internet materials.

The analyses confirm that regular upward reviews of pensions and gratuities in the country without appropriate strategies for financing the scheme has become a major problem, which calls for immediate solution in other to alleviate the suffering and hardship of retirees in the country.

The research work recommends that the Nigerian government should encourage the option of having the banks where the salary accounts of employees are domiciled to make pension deductions on monthly basis and have it remitted to the concerned body (PFAs).

The need for public enlightenment on the merit of the new contributory pension scheme, the 2004 Pension Reform Act should make provision for Nigerians in Diaspora who may want to contribute to the retirement saving scheme and the government should punish those who steal pensioners funds to serve as deterrent to others.

The research conclude that a well organized structure that will ensure prompt payment of retirees and pensioners is highly desirable and this must be vigorously pursued by the government.

Table Of Contents

Title Page                 i

Approval Page          ii

Declaration                iii

Dedication                   iv

Acknowledgement                      v

Abstract                      vi

Table of Contents                 vii

Chapter One-Introduction            1-4

Chapter Two-Literature Review       5-56

Chapter Three-Research Methodology     57-58

Chapter Four-Data Presentation & Analysis        59-75

Chapter Five-Summary, Conclusion & Policy Recommendations       76-79

References                              80-85


Background Of Study

The purpose of occupational pension scheme is to provide employees regular and stable income after their retirement from service.

It is an arrangement an employer or a group of employers use(s) to provide pension (and sometimes other) benefits for their employees when they leave or retire.

They also provide benefits to the employee’s dependant if the employee dies. This scheme is usually funded by contributions from just the employer, or from both the employer and the employee.

A good pension scheme does not only serve as an incentive to employees but helps to attract and retain experienced staff.

The first pension legislation in Nigeria was enacted in 1951 by the British colonial administration, referred to as the Pension Ordinance, with retrospective effect from 1st January, 1946.

The pension which was initially designed for colonial officers who were moved from post to post in the vast British Empire was to ensure their continuity of service wherever and whenever they were deployed to serve the colonial administration.

When the law eventually became applicable to Nigerians, the application was at the discretion of the Governor – General.

Pension was therefore not a right for Nigerians under the Ordinance. To redress this, a new Pensions Act was enacted in 1979 referred to as the Pensions Act No. 102 of 1979; retroactively effective from 1st April, 1974.

The Act consolidated all enactments on pensions and incorporated pensions and gratuity scales designed for public officers by the Udoji Public Service Review Commission in 1974.


Aaron, H.J. (1966), “The Social Insurance Paradox” Canadian Journal of Economics and Political Science, Vol.32.

Aaron, H.J. and Robert D. Reischauer (1998), “Countdown to Reform”, Century Foundation Press, New York.

Abdul, S.J. (2004), “Pension Administration in Nigeria-The Past to the Present” Text of Paper One Delivered at the Seminar/Workshop for Accountants, Internal Auditors and Administrative Officers of National of National Orientation Agency, Lokoja – Nigeria.

Abel, Andrew B. (1986) “Assessing Dynamic Efficiency: Theory and Evidence. NBER Working Paper No.2097.

Adam Shams W., (2004) “An Evaluation of the Pension Scheme of Ahmadu Bello University Zaria”. An Unpublished Undergraduate Project Submitted to the Department of Economics, Ahmadu Bello University, Zaria – Nigeria.

AFL – C10 (1996), Capital Strategies: Leveraging Financial Resources to Strengthen our Work Places and Communities. A Digest for Union Leaders. AFL-C10, Washington DC.

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