EVALUATION OF PENSION REFORMS IN NIGERIA: A COMPARISON
BETWEEN THE OLD AND NEW SCHEMES

Nwaoma, G.E. and Okafor, M.C
Department of Accounting
Michael Okpara University of Agriculture Umudike

Contributory pension system (CPS) was introduced in Nigeria in July, 2004 to replace the old
defined Benefit (Pay-as-you-go) system. The motive behind the introduction of the new pension
system is to reduce the poverty of Nigerian workers in Public & Private sectors and improve
their standard of living. The Pensions Reform Act of 2004 brought a new dawn in Nigerian
Pension industry which formally was a defined benefit but now defined contributory. Although
the new scheme is being adjusted to be better than the old scheme in that it is expected to
remedy all the abnormalities, ranging from diversion/looting of Pensions funds to poor
records, it is advocated that PENCOMM should be alive to their responsibilities in monitoring,
supervisory, coordinating and over-regulating the pension industry in Nigeria to get these
objectives of the government over the Pension reform achieved.
Keywords: Pension Scheme, Deferred Benefit Scheme (DBS), Contributory Pension Scheme
(CPS), Retirement Benefit, Pension Fund Administrators

Download Full Text

Leave a Reply

Your email address will not be published.