The political economy of pensions

Abstract

The paper assesses the success and challenges of pension industry in Nigeria, as a result of various reform that taken place. We find that the Pension Reform Act (PRA) 2004 make it possible for the industry to grow. However, the activities of the regulators of the industry are making it difficult for the pension industry to achieve is mandate. The empirical evidence shows that there is a positive relationship between contributory pension scheme (CPS) and gross domestic product (GDP). This result suggests that contributory pension scheme (CPS) have positive impact on the economy of Nigeria. Thirdly, we find that the respondents from stakeholders of the pension industry indicate that there is transparency and accountability in the financial reporting of the pension industry, operational and market risk affect pension fund management and return on pension fund. We recommend that the risk assessment should be improved upon in the area of pre-investment risk appraisal. This will help to guide against economic and political risks that are prevalent in an emerging economy of ours in Nigeria.