Abstract
This study examined the cause of the controversy in the implementation of the contributory pension scheme among the Ministries, Departments and Agencies (MDAs) in Nigeria. Descriptive methods of analysis were used to analyse the data. The result showed that misstatement in the disclosure of employees’ contribution is the major cause of the controversy. Also, the result revealed that the personnel cost releases to the MDAs since the inception of the scheme is 92.5% of the gross personnel cost budget of each institution while the balance of 7.5% of the personnel cost budget represents the deduction at “source” for the individual employee which is being credited to the employee’s Retirement Saving Account open with the employee’s choice Pension Fund Administrators through the Central Bank of Nigeria. More also, the findings established that discrepancies in the presentation of the employees’ deduction in the payrolls and individual employees’ payslips largely accounted for the continuous restiveness among the Ministries, Department and Agencies (MDAs) in Nigeria. The resultsshowed that some MDAs disclosed the employees’ deduction as a memorandum entry in the individual employee’s payslips andpayroll, while others disclosed it under the basic salary column as additional deduction by the MDAsfrom the monthly employee’s emolument. The study concluded that only uniform accounting treatment of the employees’ deduction in the personnel accounting records will endthe cold war in the implementation of the Contributory Pension Scheme among the employees in the Nigerian Ministries, Department and Agencies.
Highlights
The implementation and operation of the Contributory Pension Scheme (CPS) has been generating continuous restiveness within the university systemand other parastatals due to the conflicting interpretations by universities, polytechnics and other tertiary institutions of the essential contents of the Pension Reform Act 2004
92.5% of monthly salary released to the MDAs are paid across the numerous employees, as monthly emolument while 7.5% of the balance is credited to the employees’ Retirement Savings Account with the Pension Fund Administrator of employee’s choice along with the Federal Government counterpart proportionate contribution of 7.5% adding up to a total of 15% credited to the employee’s Retirement Savings Account and no MDAs has a direct access to this pool of fund once credited to the employee’s account with the pension fund administration[19]
The objective of this paper is to examine the cause of the controversy on the implementation of the contributory pension scheme in Nigeria and proffer an acceptable accounting treatment for disclosing employee’s deduction in the individual pay advice and the institution’s payroll
Summary
The implementation and operation of the Contributory Pension Scheme (CPS) has been generating continuous restiveness within the university systemand other parastatals due to the conflicting interpretations by universities, polytechnics and other tertiary institutions of the essential contents of the Pension Reform Act 2004. The implementation of the Contributory Pension Scheme in the Public Service of the Federal Republic of Nigeria came into force with effect from 1st July, 2004 and all Ministries, Departments and Agencies were instructed to comply. The scheme is intended to ensure that every pensioner who has worked in either the public or private sector receives his retirement benefits as and when due. In order to ensure timely remittance of the deduction from the employees’ remuneration, the Budget Office deducts the employees’ statutory contributions from the allocations to the Ministries, Departments and Agencies (MDAs) through the monthlyRecurrent General Warrants
Sign-in/Register to view highlights & summary Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callMore From: International Journal of Economics, Finance and Management Sciences
Disclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
