Impact of Contributory Pension Scheme on Payment of Retirement Benefits in Nigeria

Clement Ojile 1 ,
Ioraver N. Tsegba 2,
Moses I. Duenya 3
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: intse2004@yahoo.co

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 impact 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.
Keywords: Contributory Pension Scheme, payment of Retirement Benefits, Pension Fund
Assets, Pension Fund Contribution.

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