Impact of Contributory Pension Scheme on Payment of Retirement Benefits in Nigeria
Clement Ojile1, Ioraver N. Tsegba2, & Moses I. Duenya3
1,3 Doctoral Student of Accounting, Joseph Sarwuan Tarka University, Makurdi
2 Professor of Accounting and Finance, Joseph Sarwuan Tarka University, Makurdi
Corresponding Author: Ioraver N. Tsegba; Email: firstname.lastname@example.org
The objective of this study was to examine the impact of Contributory Pension Scheme on payment of retirement benefits in Nigeria. Specifically, the study sought to ascertain the effect of pension fund contribution and pension fund assets held by Pension Fund Administrators (PFAs) on payment of retirement benefits to retirees. The population of the study comprised of 22 PFAs who operated Retirement Savings Account for the contributors during the study period. The sample size was 21 PFAs purposefully selected for this study. Secondary data were employed and collected from audited financial statements of the PFAs, and published annual reports of National Pension Commission. Panel regression, using the random effect model based on the recommendation of the Hausman specification test with the aid of STATA (Version 13.0), was used for data analysis. Findings from the analysis revealed that the pension fund assets under the management of PFAs have a positive and significant effect on payment of retirement benefits. The implication of this finding to the retirees is that funds (assets) have been significantly deployed for payment of retirement benefits. The study also found that pension fund contribution has a positive but insignificant effect on payment of retirement benefits in Nigeria. Based on the findings, the study recommended that the Federal Government of Nigeria should sustain the implementation of the scheme. The Pension Regulator, PENCOM should strengthen its oversight function over the PFAs to ensure timely payment of pension to pensioners by setting a performance standard – maximum time to pay retirees their benefits upon exit from service.