Pension Administration and Capital Formation in Nigeria: The Challenges

Abstract

Pension issues affect both public and private sectors of any economy. The primary objective of pension scheme is to ensure the retiree’s standard of living is smoothened after retirement to have normal living. It is also to provide retirement benefit to retirees, moreso, to provide uniform guidelines for administration and payment of benefit. The pension scheme could be funded by contribution(s) either by the employer or the employee or employer/employee contribution. Pension scheme provides retirement benefit including incentives to employees. But despite the vital role of pension scheme to sustain better living after retirement, the scheme is not reasonably sensitized. Particularly, the private sector employers are unable to provide retirement benefits to their retirees, this is traced to weak legitimate laws on pension. Besides earnings on pension funds are not accessible to retirees. In conclusion, effective pension administration and capital formation is capable of industrializing the Nigerian economy. Therefore, it is recommended that defined pension contribution should be encouraged with effective legal backing for maximum result to retirees and growth of the economy. Keywords: Pension administration, Retiree, Retirement benefit, Pension contribution, Investment decision