AGRICULTURAL SCIENCE.
DEPARTMENT OF CROP SCIENCE
PREPARING FOR RETIREMENT: RETIREMENT POLICY IN NIGERIA
A TERM PAPER
PRESENTED IN PARTIAL FULFILLMENT OF THE REQUIREMENT FOR THE
G.S. 104
OBUTE CASMIR .U. 2006/142628
LECTURER: NWACHUKWU K. 0.
SEPTEMBER 2007
TITLE PAGE
Preparing for Retirement: Retirement Policy in Nigeria.
DEDICATION ii.
I humbly dedicate this work to my loving and caring family for their
support in bringing me into this university as well as seeing me through.
iii. ACKNOWLEDGMENT
I give glory to God for his infinity grace, which is making everything
possible for me in life. The university of Nigeria Library and my Lecturer:
Mr. Nwachukwu K. 0. for his contributions and advice.
PREFACE
This term paper is produced based on the fact that the retires in
Nigeria today are undergoing great pains duet to the fact that
governmentlprivate bodies which they serve are refusing to pay or to follow
the policies of their entitlement/pension.
In this work, I tried to let the present day workers understand the
problems those have been retired are faced today and letting them know that
if they don't embark on retirement policy planning, they same problems.
This work is addressed to all civil servant and private workers in a retire
services and to those that are yet to start working and most especially
retirees, for them lmow the ways by which they can get out of he problems
they are being faced.
This terin paper covers the introduction - chapter 1, the problems of
Retirement Policy- Chapter 2, the way out-Chapter 3, and suggestion.
I say big thanks to my loving family for their coinmense support, for
with& them this terin paper wouldn't have been a success.
TABLE OF CONTENTS
CHAPTER ONE: INTRODUCTION . . 1 : 1 Concepts and Definltlons: ................................ 1 :2 Advantages of Retirement: ............................... 1 :3 Effects oERetirement Policy on Income: --------------- 1 :4 Preparing for Retirement: ---------------------------------
CHAPTER TWO: PROBLEMS OF RETIREMENT POLICY IN NIGERIA
2: 1 Mandatory Retirements: .................................... 2:2 Attitudes of Friends and Families: ......................... 2:3 Pressures on Employees by Employers: .................... 214 Lacks of Plans: ................................................ 2:5 Inefficiencv of Pension: .................................... 2:6 Increased Outstanding Pension On the Economy: ------
CHAPTER THREE: THE PROBLEMS OW RETIREMENT. THE WAY OUT.
3 : 1 Preparing For Retirement: ................................... 3:2 Opportunity For Services in the religious community: - 3 :3 Opportunity for stewardship: ...............................
. . 3 14 Recreational Opportunltles: ................................ 3:5 Possibilities for Re-employment: .......................... 3 :6 The Government and the Review of Retirement in Nigeria
CHAPTER FOIJR: SUGGESTION AND CONCLUSION:---------
v
PAGES 1 . . 11 ... 111
iv v
1 2
CHAPTER ONE
INTRODUCTION (CONCEPT AND DEFINITION)
Retirement in Nigeria over the years has posed some problems to
the retirees, to the govcrnment or private body and to thc country
As a result of these, there are two general views about retirement
policy. It is either you are looking forward to retirement with joy and
happiness or never wish to be a reality. The fact is that "retirement is a
valid pheneomenon"'.
Majority of people look forward to retirement with fixed feeling
with adequate planning, some retires look forwards to it with joy and
happiness while others considers it as terminal evil". The fact is that
retirement policy/planning is an integral part of out working life. It
involves planning for inactive days.
Retirement can be defined as complete ceasation from labour force
depending on a pension or social security for income, that is, it is the
disengagement from work after the completion of stipulated conditions.
Usually, such conditions are related to age and length of service. In other
words retirement is generally defined as a systematic approach to
planning for the future from the beginning of ones' work life.
Policy is a plan of action, statement of ideals etc. Proposed or
adopted by government, political parties, business etc.
Retirement policy is a systematic principles approach of planning
or plan of action either statement for the future adopted or proposed by
parastatals from beginning of one's work life.
1:2 Advantage of Retirement Policy:
There are important reasons for retirement. Retirement policy has
advantages such as:
1 2 .1 Releases from the pressure of a job.
1 :2.2 Freedom to begin a second career.
1 :2.3 Concentration on interest previously neglected.
1 :24 Ilaving time for more adequate health care.
1 :2.6 Choice of friends on the basis of congeniality (pleasing because of
l~aving a personality).
1 :2.6 Opportunity for using skills and time in a more concentrate ministry
to others.
12.7 Have better control of emotions with resulting serenity.
1:2.8 IIave self-acceptance and lack of intense competition with others.
You are to be conscious of the fact that its' part of your life cycle.
The best approach for retirement planning is "employing systematic
disengagemcnt from active life from the beginningv2.
1:3 Effects Of Retirement Income:
Income is defined as the money received over a certain period,
especially as payment for work or as interest on investment.
Retirement has great effects on income residence and family
structure. 'I'here was social impact of the income changes that
accompany retirement. Majority build their own house enter most
influential impact of retirement is the economic
Retirement has effect on family structurc. Most retired people
maimed and living with a spouse. It was found out that retirement has b
effect on the relationships with couples.
CHAPTER TWO
PROBLEMS OF RETIREMENT POLICY IN NIGERIA
2: 1 Mandatory Retirements:
These policies discriminates against an age category and this
violate the principles of equal employment opportunity. It is believed
that mandatory retirement policies waste talent and productive potential.
Also that mandatory retirement robs individuals of the opportunity to
exercise talents and skills and society is deprived of their product.
2:2 Attitude Of Friends And Family:
lhcsc play an important role in the retirement decision. For
instance, a child may want his father to retire another may not.
A women's husband may want her to retire and another may not.
.'One person lives in a neighbourhood where retirement is sneered at,
another lives in a leisure community where retirement is the rule rather
than the exception"'. People fell that if one retires, than the
characteristics of such person's friend's and family imput to retire will be
imputed to him.
All these factors sometimes encourage or discourage retirements
in Nigeria.
2:3 Pressure On Employees By Employers:
It has been found that some employers exert pressure on employees
to retire. This they do by suggestion or by job transfers or reclassification
ofjob that substantially alter the employers working conditions.
Also employers frustrate employees. This problem inevitably
results in a situation whereby an employee is either directed to leave the
service of his organization or he decides to leave voluntarily before the
retirement age or point, a1His condition is known as "Premature or early
retirement'". This moving of pressure is caused by overstaffing, poor
capital of the company, inefficient management and so on.
2:4 Lacks Of Plans:
Most employees are faced with miserable life due to lack of plans
after retirement. The inability of pensioners to save into a pension active
services have resulted in the inadequacy in feeding themselves, proper
clothing or paying of their children school fees.
Many have been ejected from their rented homes, as a result of
inability to pay rent when due. Some have borrowers while others have
out to become beggars.
According to chief Stcvcn Nwachultwu "Life for the retired in
Nigeria could be said to be funny in the sense that pensions are a
~uxury"'. Some at the least opportunity rush to acquire Illegal wealth
through fraudulent activities because of the unknown.
"The systematized way of doing things known as bureaucracy has
given a typical civil servant a fear that he might not get anything
going. Civil servants have been living a systemized life. So, there
is fear in getting adventures, it has been discovered that most civil
servants do not actually prepare for retircrnent. They are rather
blown away by the wind of retirement'".
2:5 Inefficiency Of Pension:
l'he issue of pension in Nigeria has not been a pleasant one over
the years. l'he situation has made the pensioners quite disappointed and
sorrowful. Other look exhausted and some other has died while
struggling for their pensions. It has turned out to be a thing to beg for,
but it ought to be a constitutional right under section 173 which stipulates
that "nobody shall have the right to withhold pension"7.
But in most cases, pension of retires in Nigeria have been delayed
for 6 months to 2years or more to worsen the plight of these retires. In an
economy like Nigeria's where inflation prevails, employees need not rely
on convcntries and paltry insurance provision by their employers or
govcrnnient. One must not just rely on pension; the effect on domestic
responsibilities of retirees has led to reduction in their expenses and
denying of themselves most of the basic necessities of life. For instance,
a retires whose children go to school, if he gives them say $4100 he now
reduces it to less than W50; if he had been buying a bag of garri, he has to .
be reduced to either half a bag and the daily meal has to be reduced to
either two meals or one in a day depending on the situation.
Working had to justifi wages though is a necessity, "an employer
cannot mala you rich but comfortable. We must make the extra effort to
succeed and prosper after retirement and that is the retirement policy"x.
2.6: Increased Outstanding Pensions On The Economy:
The overtake of salaries of active workers by pension payment is
so serious that in some government entities, pension payment now
overtake the salary of their active worker as they expressed fear that the
situation may worsen as pensioners live longer and if there is upward
review of pcnsioners" benefits Research in 2002-2006, shows estimates
on government had paid over N30 billion Naira to nonmilitary pensioners
since 1999 over 242 billion Naira as outstanding pension.
Some factors responsible for this include, reduction in service or
force retirement of relatively going officers, salary increase by both
government and private sector without commensurate increase in b
contributions and in most case no contribution at all over the year.
Other factors include unplanned increase in benefit especially
during political periods, this uses unsure scheme as the preface pensions
vehicles, and instability in the public service rather than relying on Post-
Service Pension identified increase in staff strength and large scale
retirement in most organization one also contributing factors.
CHAPTER THREE
PROBLEMS OF RETIREMENTS: THE WAY OLD
3:l Preparing For Retirement:
Being in mind the inadequacies and inefficiencies in the payment
of pension and gravity in Nigeria, this is need for employees in all sectors
to make adequate preparation for the rainy day. This can be achieved
through the following means: -
3: 1.1 Having Investments
3: 1.2 Buying of shares
3: 1.3 Proper Savings
3 : 1.4 A carring assets
3 : 1.5 Setting up a business etc.
3:2 Opportunity For Service In The Religious Community:
Religious community may mean the church or other religion
organizations. A retiree has a tremendous opportunity, to serve in the
religions community 01' his choice. It is an established fact that popular
presentation ot'tcn implies that the sole enough of life i: to live
comfortably during retirement or old age. Retires wish to fell useful, to
continue contributing actively to the welfare of others, want to
demonstrate love, having basic right; being loved and wanted, finding
recognition and meaning, and the taking of fulfillment and satisfaction.
Meeting thesc needs will helps to satisfy and gratify others. An
important plan for this is the religious community sic as the church and
its auxiliary organization and programmes.
3:3 Opportunity for Stewardship:
The retirees have tremendous opportunities for stewardship
especially in the area of helping othcrs. It is generally aclmow ledged that
one of thc worst afflications feeling that he is no longer useful. As it was
earlier stated, one of thc major problems of retirees is that which result
from sense of uselessness; yet quitc frankly her is one problem or
affliction that is quite unnecessary to endure. In the sphcrc of voluntary
social service or in civil circles there is work in abundance for any one *
who care to roll up his sleeves and yet down to it.
3:4 Recreational Opportunity:
Recreational simply means the activity done for enjoyment when
one is not working. It helps a man to fulfill his leisure. Retirees have
opportunities to participate in wholesome activities will help them not
only to fill up free time but teach them ways to make those free hours
en-joyable, and happy experience.
A retiree in order to have a balanced recreation programme must
participate in carring retreats, crafts, drama, recreation, music, parties
banquet, fellowships, sports, games, and trips. These are earning them.
3:5 Possibilities Of Re-Employment:
A purposeful work within the play social capacity and which can
provide human contact is positively good for the retiree. In view of
present make up and trend of the population the working retiree is
positively good for the society. A rctirce can work; there is no reason any
one compulsory retired should necessarily regard his working and earning
days as over. Statistics suggest in Nigeria that the avcrage age for b
retirement is sixty for civil servant and company workers, 65 for judges
and clergyman. This has been established by the policies of large firms
with cut and died promotion and supper ammuation schemes rather than
by the individual's wish to retire.
The Table Below Shows Some Job Opportunities For Retirees.
Policeman or Military
A teacher
civil scrvant
--
business
Male
MaleIFemale
Male
MaleIFemale
Security man, Magistrate or a judge on contract, a manager of a shop etc. Manager of petrol station, shop, public relation officer, Administrative Post, Proprietor of nursery school, house caretaker etc Company manager, Manager of retirement home, assisting people who build personal houses, security man, petrol station, school bursars, company secretaries, managers of shop etc. Security Man, petrol station, school bursars, company secretaries, manager of shops e.t.c. Transport manager, Property
accountant
.- - Farmers, Tailor, Printer
3:6 The Government And The Review Of Retirement
I small scale business and church secretary.
Male/Female Own a shop, such as bookstore, , shoes, thrift, and gift shop etc
Policies In Nigeria:
---- -
The Sew pension schemes in Nigeria such as the pay AS YOU GO
(PAYG), PAY AS YOU EARN (PAYE), schemes lack appropriate
finding their roles have been insignificant over the years.
shop for selling farm products, soap making and -- car washing. --A-
Empowerment of these schemes in making sure that worker abide
by them and pay their taxes as at when due, will ensure that the
allocation of funds for pensions is not neglected.
This would help to alleviate the plights of the retirees in their
struggle for pensions.
CHAPTER FOUR
SUGGESTION AND CONCLUSION
In conclusion, I would want to suggest that anyone who is in active
service at prescnt should endeavour to male plans for retirement. So that
hclshe will not be faced with one or more of the problem of retirement
discussed in chapter 2, because one cannot prcdict the situations of the
economy of' Nigeria due to fear of the unknown.
Also since it is the right of every retiree to pension, I think the
government and private bodies should do their best in paying up
outstanding pension to retirees because the retirees have really gone
through sufferings and pains which have led to the dcath of some in the
struggle for their pensions.
Finally, if I may suggest, I would say that the government should
not be making unnecessary increment in salaries because this has led to
bulky pensions of retirees, which the government have not been able to
settle. The retiree should also engaged in recreational activities after
retirembent.
END NOTE I F.A. Oyeniyi. Experts List option's for retirees 'retirement is a
valid phenomenon. (The Guardian, Feb 12,2002),
2 F.A. Oyeniyi. Expert list options for retirees "employing systematic disengagement from active life from the beginning."
3 Amo. A. Omoresemi, Retirement a real transition. "one person lives in a neighbourhood where retirement is sneered at, another lives ---- ---- (Abibos Educational services publication: Kano Nigeria, 1981) p6.
4 Adamson Momon. Delimma of premature Retirement, a situation whereby an employee is either directed to leave the service of his organization --------, a condition known as premature or early retirement' (Daily Tiones, May 10, 1995), p.
5~osephine, Nwannah, Unplanned Retirement. 'The systematized way of doing things known as bureaucracy has given a typical civil servants --------,' (The comet Aug 6, 2001.), p. 32'.
6 Canre, Olayiwola. Guiending pains of pensioners, "nobody shall have the right to with hold pension (Guardian, Nov. 19,2001) P".
7 Leonard E.Wedu. Making the best of retirement. Am employer cannot make you rich but just comfortable. We must make extra1 effort to succeed and prosper after retirement'. (Nashville, Tennessei Sunday school board of southern conversion; 1976) P. 46.
8 Fred , Iwenjora. My problems are minimal in Retirement, "life for retired in Nigeria could be said to be funny in the sense that ponsion are a luxury" (Vanguard, Nov, 27, 2001) pi'. .
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