Challenges Faced By Retirees Under The Contributory Pension Scheme

Abstract

This paper is an attempt to find out the challenges faced by retirees under the New Contributory Pension Scheme as far as getting their entitlements are concerned. The Old Pension System in the Public Service was non contributory and the cost was fully borne by the government. The old Scheme was marked with various challenges ranging from non-availability of funds to pay pensioners, poor management of pension records to embezzlement of pension funds. Many employees who worked and spent the useful parts of their lives in the services of the nation were not paid their entitlements years after retirement. Some even died without receiving any benefit. The Contributory Pension Scheme was introduced to address the challenges of the Old Pension Scheme. How have retirees under the New Pension Scheme fared and how have the operators of the Scheme been able to operate according to the Pension Reform Act, 2004? The researchers interviewed fifteen out of the sixty personnel of the National Cereals Research Institute who retired between 2012 and 2017 to gather information for this study. From the data gathered from the interview, it was discovered that in terms of the worth of benefits, the retirees have not fared better than those who retired under the Old Pension Scheme as none of them gets 50% of his last salary as pension and even the promptness of the payment of entitlements is beginning to disappear as the delay syndrome is gradually creeping into the new system. The paper concludes that the desired objectives of the Contributory Pension Scheme are yet to be achieved. It is recommended that the National Pension Commission (PENCOM) should strengthen its regulation over Pension Fund Administrators (PFAs) to ensure that the Scheme runs according to the provisions of the Pension Reform Act (2004) amongst other recommendations.