This study was undertaken to appraise the contributory pension scheme and retirees. The study opened with chapter one where the statement of the problem was clearly defined. The study objectives and research hypotheses were defined and formulated respectively. This study was carried out among selected retirees of the Lagos state Government. The data were analysed through Statistical Package for Social Sciences Software (SPSS) version 21. Based on the study conducted, this research gave the researcher room to conclude that contributory pension scheme is one of the essential ingredients needed in both public, private enterprise and corporate organizations because it has impact on efficient utilization of employees in achieving the present and future goals of an establishment.




  • Background to the Study

Pension systems have become major elements of social development in the twentieth century, with particularly important effects on the well-being of older persons in our society. The past few years in Nigeria have witnessed concerted efforts by the various successive governments in the country at improving the living standards among the older category through Pension system, particularly with this in pension reforms, its payments and the maturing of pension plans. It is well acknowledged in the literature that the responsibility of any government is to provide and sustain the welfare of its workers while in the service and afer retirement. This is so because productivity and rate of growth are largely and positively related to incentives given to workers. This also has been recognized by successive governments in Nigeria as seen from various salary and pension reviews in the country. However, the essence of pension scheme is to provide workers with regular and stable income after retirement in order to cope with challenges of postretirement livelihood (Dogon-daji and Mukhtar, 2010). Hence, a worker who has worked in a given establishment for some years deserve some benefit which could take the form of pension or gratuity payable to the worker by the employer at the time of retirement.

Edogbanya (2013) viewed pension as a sum of money paid regularly to a person who no longer work because of old age, disability, retirement or to his widowed or dependent children by the state, former employers or from provident fund to which he and his employer both contributed. The pre 2004 pension reforms had a number of problems that were adjudged to be against workers welfare, Olanrewaju (2011) and Dostal (2010) pointed out the major weaknesses of the pre 2004 pension reforms to include: Massive accumulation of debt estimated at over two trillion naira; large-scale arrears of unfunded entitlement of retirees; inadequate budgetary provisions coupled with rising life expectancy; increasing number of employers, wages and pensions; and inadequate supervision and regulation of pension system. These shortcomings adversely affected payments of retirement benefits to retirees in Nigeria. Contributory Pension Scheme is a full funded pension scheme that tries to generate adequate funds (contribution) through savings. The scheme assists improvident individuals to save, and these savings are meant to satisfy the interest of the employee at retirement, shareholders, and also contribute effectively to economic development. Contributory Pension Scheme has been identified as an institutional investor that generates long-term contractual savings and stimulates the development of securities market (Mesike and Ibiwoye, 2012). Hence, this study presents a critical appraisal of contributory pension scheme and retirees’ welfare.

  • Statement of the Research Problem

The problems that have bedeviled the Pension Scheme that existed in Nigeria prior to 2004 have made it increasingly unsustainable. It was for these problems of increasing public expenditure/huge deficit, arbitrary increases in salaries and pensions as well as poor administrative structures, that the need for pension reform became inevitable. The problems were further aggravated with the constant political manipulation, besides non-payment of pensions for several years, which greatly lowered the welfare of retirees. Even the promised benefits were oen inadequate due to rampant inflation against which pensioners had no protection, coupled with inaccurate record keeping that gave opportunities for corruption. Although the new pension reform is guided by the key principles of sustainability, accountability, equity, flexibility and practicability, there is also this fear that funds or Retirees Savings Account (RSA) contributory can be mismanaged by the existing trustees. Also, risk of a given portfolio determines the return thereof. Some pension fund administrators do not have the necessary risk management profile while some fail to pay regard to rating signals needed to making sound investment decision. In the face of all these, managing and administering contributory pension funds have continued to pose major challenge to Nigerian government. Yet, contributory pension scheme which guarantees employees certain level of comfort in their years of retirement has become a source of worry and concern to employees and retirees in the recent times. As it has become a common knowledge to see retirees forming unending queues in a bid to collect pension payment with occasional reports of untimely deaths due to the exercise. The retirees under the old Pension Scheme are groaning because they are finding it increasingly difficult to access their retirement benefits several months and years after they have been discharged by their erstwhile employers and all these in turn, psychologically affect the welfare and performance of many Nigerian employees in the organization. It is against this backdrop that this study seeks to present a critical appraisal of contributory pension scheme and retirees’ welfare in order to confirm the adequacy and wellbeing of the retirees in Lagos State.

  • Objectives of the Study

The main objective of the study is to examine contributory pension scheme and workers welfare in Nigeria.

Other specific objectives include:

  1. To examine if there is any significant relationship between contributory pension scheme and retirees’ welfare in Nigeria.
  2. To investigate the effect of the contributory pension scheme on retirees’ life expectancy.
  • To find out if the New Pension scheme is better than the Old Scheme in meeting worker’s welfare in Nigeria.
    • Research Hypotheses

These are statements that would be tested to determine the significance of the relationships between the variables being studied. The Null Hypotheses (Ho) represents the negative statement while the Alternative Hypotheses (Hi) represents the positive statement.

Hence, the researcher intends to test the following hypotheses:

Hypothesis One

Ho: There is no significant relationship between contributory pension scheme and retirees’ perceived welfare in Nigeria.

Hi: There is significant relationship between contributory pension scheme and retirees’ perceived welfare in Nigeria.

Hypothesis Two

Ho: There is no significant relationship between the contributory pension scheme and retirees’ life expectancy.

Hi:      There is a significant relationship between the contributory pension scheme and retirees’ life expectancy.

  • Significance of the Study

This study is of immerse importance.

It would be of importance to the Government and policy makers to modify and improve on retirement laws in the country for better service delivery.

It would serve as a source of literature and motivation for further research.

  • Scope and Limitations of the Study

This work is on the appraisal of the contributory pension scheme and retirees and Lagos state is our case study.

However, the following are the constraints encountered in the process of the research work.

Time: Being a student with so much to do such as reading for the forthcoming examinations. Etc., time therefore, constitutes a constraint in the writing of this project.

Fund: As a student with no steady sources of income, rather than the little form home. The present economic situation in the country today, has an adverse effect on the financial aspect of this research work.

Respondent: Non-challant attitude of some retirees is also another limitation

  • Definition of terms

It is very eminent to define some professional terms and language used in this work to make it easily understandable to interested readers of other disciplines.

Pension: a regular payment made by the state to people of or above the official retirement age and to some widows and disabled people. It is a fund into which a sum of money is added during an employee’s employment years and from which payments are drawn to support the person’s retirement from work in the form of periodic payments

Retiree: A retiree is a person who has permanently stopped working. Most retirees are 65 or older, they’ve worked their whole lives, and when they retire, or cease working, they’re taking a well-deserved break.



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