TWO DECADES (2004 - 2023) OF CONTRIBUTORY PENSIONS IN NIGERIA: A DEPARTURE FROM DECADENCE TO DILIGENCE

Abstract

The departure from the traditional pension system, which is mainly targeted at public servants and few selected companies called defined benefit scheme, to the contributory pension scheme was a major change in policy direction. Going by previous experience, Nigerian workers did not give the new system any chance of survival. But against all odds the scheme has traversed twenty years of consistent collection of pension remittances and prompt payment of pensions entitlements to deserving beneficiaries either as retired contributors or next of kin of deceased members. Every worker looks forward to peaceful retirement when he/she will depend on a pension system for sustenance. The history of retirement benefit in Nigeria is everything but desirable. So bad was the defined benefit scheme in Nigeria that relied on annual budgetary provision for retirement pension disbursement that pensioners are found littered all over the places under the guise of verification. Yet in most cases under the defined benefit scheme, retirees were not paid as and when due. The decay was an eyesore that workers dreaded retirement like a monster. Until the Fola Adeola led Pension Reform Committee that understudied the Contributory Pension system in Chile and recommended a departure from Pay As You Go hitherto operated in Nigeria. This culminated in the Pension Reforms Act 2004 which brought into existence the National Pension Commission as the only body that regulates the new pension scheme. This paper takes a cursory look at the journey of deviation from the old order (Pension Act 1979) to new order (Pension Reform Act 2004, now PRA 2014), highlighting the commencement, consolidation and continuity with a view to putting facts in proper perspective.