ABSTRACT
This research work tends to examine the impact of pension reform on organizational performance in the public sector with special reference to Lagos State Ministry of Education.
Descriptive design was implored for the research design. Also a simple random sampling technique was used in the data selection. This technique was used to avoid biasness in the selection of respondents.
A sample of Fifty (50) was drawn from the population resulting to Fifty questionnaires being administered to staff of Lagos State Ministry of Education.
The data gathered were tabulated and presented in percentage. The two hypotheses formulated were analysis using Chi-Square Analysis method. Conclusions were drawn from the result of the analysis. Based on the analyasis, the result indicated that Direct contributory (DC) of the pension reform act is practically existing in the public service. Also, Direct Contributory (DC) reform Scheme has significant improvement on workers welfare
Finally Solutions were recommended to obviate deterioration on workers productivity.
CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND TO THE STUDY
The pension reform act has become a socio-economic and political issue that has engaged the attention of government, employers and workers not only in Nigeria, but also in many developing countries of Africa, Asia and Latin America.
Before the enacted and established- Olusegun-Obasanjo- led- pension reform of June 25th, 2004, Nigerian operated a defined benefit (DB) pension Scheme, which was largely unfunded and non-contributory. The system was also characterized as “pay-as-you-go” (PAYG) scheme since retires were to be supported, not by their previous contributions, but by annual budgetary provisions.
Thus, the bane of this new Olusegun Obasanjo reformed pension scheme, was to review the inefficient, ineffective and fraughting existing problems, merged with insecurity some of these problems were desertion of unfunded state run pension system which caused anguish, want and penurial existence for pensioner in their old age.
a) Problem of the harmonization of the public and private pension system and
b) Confusion as to the institutional regulator of the scheme
c) Problem of determining the law as that governs the management, control administration and investment of pension funds and
d) Bad record keeping in private and public offices making it impossible to access and quantify the contribution of individual employee and endemic corruption.
Fashoyin,(1994)
Therefore, in effect of this, the Olusegun Obasanjo-led-government incorporated the need at reversing the situation through developing a system that is sustenance and proned to providing the ultimate goal and capacity in ensuring stable source of retirement savings for each participants.
With this face in June, 2004 of the pension Reform Act, 2004, a new pension was replace as against the previous DB Scheme(Defined Benefit).
The new Scheme in-place of DB(Defined Benefit), was the DEFINED CONTRIBUTION (DC) Scheme, which was contributory in nature, and mandatory on employers and workers (in the public and private sector organizations with 5 or more employees) to contribute 7.5% each of the emoluments of the employee into a retirement savings account (RSA). However, for the military, the contribution rate is 2.5% with the government contributing 12.5%. This system has a number of features making it an increasingly vital component of the pension systems of many countries not only in the Organization of Economic Corporation and Development (OECD)countries, but also amongst the developing countries, particularly in Asia and Latin America.
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