AT
THE ANNUAL PUBLIC LECTURE
OF
THE CHARTERED INSTITUTE OF PERSONNEL MANAGEMENT OF NIGERIA
(ONDO STATE BRANCH)
TOPIC: CONTRIBUTORY PENSION SCHEME IN THE PUBLIC SERVICE:
CHALLENGES AND BENEFITS.
DATE: WEDNESDAY 26TH MARCH, 2014
VENUE: BABAFUNKE AJASIN AUDITORIUM,
MINISTRY OF WOMEN AFFAIRS,
AKURE, ONDO STATE
TIME: 10:00A.M
BY
PETER TAI ADEDIJI, GMD/CEO, PENSIONSCOPE
1.0 INTRODUCTION
1.1 THE CONCEPT OF PENSION
The concept could be traced to many sources.
The all relevant sources are related to human
The need for some social security
Establishment of pension scheme
Examples:
Henry VIII (of England)
Brought a kind of revolution when he attacked English Monasteries who were hitherto very influential and powerful.
By 1540, the last English monastery was closed down.
The need to make some provision in the form of pension came up especially for the monks and nuns as they were virtually not engaged in any form of vocation that can take care of their needs.
The Court of Augmentations was created to administer the monastic land.
Pensions were paid out of the proceeds of the land sold.
2.2 EVOLUTION OF PENSION SCHEME IN NIGERIA
PRE-INDEPENDENCE ERA
To ensure the interest of the colonial master.The first formalized public sector pension legislation in Nigeria: the pension ordinance of 1951.
The Pension Ordinance was at the mercy of the colonial masters.
POST INDEPENDENCE ERA
Due to pressure groups and the need to satisfy many interests, the Pension Ordinance was amended severally.The enactment of the Pension Decrees No 2 of 1979.
The Decree established Define Benefit schemes.
Problems of DBS: Non-contributory, Depended on budgetary provision, unsustainability, lack of transparency and Poor record keeping.
The tortuous journey led to the new CPS under the PRA 2004.
2.3 WHY PENSION ‘SEF’?
Imagine a situation of no Pension at all
Pension is a way of planning for the future
Future is full of uncertainties
The concern by the moralist in the application of the Law of Diminishing Returns to employees by the Entrepreneur
OBJECTIVES OF PENSION SCHEMS
Provide earning at retirement
Retain emotional and psychological balance
Help cultivate saving culture
Increase life expectancy
Help to reduce corruption
Provide means to meet some essentials at retirement e.g. Food, Drugs e.t.c.
3.0 THE PENSION REFORM ACT 2004
3.1 AIMS AND OBJECTIVES
4.0 BENEFITS
Encourages Savings
Employment Generation
Disappearance of Ghost Pensioner from Pay roll of Pensioners
A boost to both the capital and money market- grow the economy
Payment of tax through Personal income of employees
Convenience to the retirees; just get your alert and go to your bank
Retirees receiving their entitlement adequately and promptly.
Pension liability under control; no accumulation of pension arrears
There is fiscal discipline in the budgetary process.
Development of life insurance business.
5.0 CHALLENGES
Misconception and apprehensions about the scheme.
Compliance and enforcement.
Extending the coverage to the informal sector and self employed.
Sensitization challenge.
General knowledge gap.
Lack of quality personnel to bridge the general knowledge gap.
Bringing the state and Local Government to adopt the CPS.
Combating inflation in order to ensure positive real return on savings.
Inadequate investment channels.
Taking care of post retirement risk factors.
6.0 CONCLUSION
Hear the conclusion of the matter:
what some people call problems is what others
call opportunity. Problem and opportunity is
one and the same thing.
The Contributory Pension Scheme is worth not
only giving a trial; it should be embraced like a
beautiful bride.
7.0 THE PRESENTER Peter Tai Adediji
GMD/CEO, Adason Group
Adason Communications
Pensions cope magazine
Pensions cope Radio
Pensions cope TV
Independent Complaint Bureau
A modern recording studio
Delight Insurance Brokers Ltd
General Insurance Broking
Life Insurance Advisors
Insurance Claims consultants
Interterms Pension Consultancy Services Ltd
Training and Workshop
Consultancy services
You can call me on:
08033135272, 08173037871
pta.adediji@gmail.com
Thank you.
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