Evaluation of Compliance with the Stipulations of the Contributory Pension Scheme: A Case Study of Quasi-Government Institutions in Nigeria

Abstract

The journey of the Contributory Pension Scheme into the Nigerian employment landscape started with the Act of the National Assembly which was passed in June 2004. By the Act, employers and employees in Nigeria are both legally required to remit 7.5% each of an employee‟s monthly emoluments to a retirement saving account managed by a registered pension fund administrator of the employee‟s choice. The employee is expected to receive the accumulated contributions plus accrued returns from the invested funds over the retirement. This arrangement has both compliance and transparency implications in the performance of this legal and social obligation. This study therefore has the objective finding out if employers are complying with the requirements of the reform. Interview method was used to obtain data from eleven out of the fourteen Universities stratified into private, state and federal-owned. Although, descriptive statistics revealed a nominal variability among the employers contrary to the Reform, analysis employing t-test and ANOVA however found that employers are operating within the stipulated 7.5%. The study recommends that universities with percentages that are nominally different from 7.5% will require to correct this anomaly especially when operating below 7.5% the Pension Commission clearly and unambiguously defines 7.5% for employers to know whether variability within scientifically approved limit can be adopted or a sacrosanct legally defined uniform 7.5% is binding.

Keywords: Pension, Contributory, Administrator, Universities, Employers and Employees