CONTRIBUTORY PENSION SCHEME: PANACEA FOR RETIREMENT WOES IN NIGERIA

Abstract

Pension management in Nigeria seems to have assumed a serious concern to the citizenry especially retirees. Over the years, funding has been the major challenge that successive government had had to grapple with. This creates avoidable problems to retirees especially, government employees, whose pension entitlements are delayed or not paid at all before they die. This resulted in the introduction of Contributary pension scheme in 2004. Part of the reason for introduction of the scheme is to resolve the issues of paucity of funds, fraud and other governance issues that dogged the Defined Benefit Scheme (Old Pension Scheme). The new scheme, Contributory Pension Scheme, is a flee from this malaise and allows workers in the formal sector to contribute to the scheme, through their salaries, while the employer contributes a stipulated percentage by law into the scheme’s treasury called. The Retirement Saving Account RSA). The essence is to reduce the financial burden of funding retirement process which was solely borne by the employers but now shared by both employers and employees in the new arrangement (CPS). This paper examined the objectives of the scheme, its benefits and challenges. The paper, however, concluded that the pension scheme is a robust, safe and dependable packaged for retirees. The paper, therefore recommended that, states, in collaboration with employers in the private sector should emphasize on the scheme to ameliorate the suffering of workers and eradicate poverty at retirement.