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The work that one does gives status to the person.    It also gives a meaning to life and feeling of contribution to general welfare.   Work also permits a person to be active, energetic and to have constructive social interaction with others.   Inspite of the face that work brings fulfillment, one must retire from active service for one cannot deny the fact that as workers grow older, they make many adjustments and tend to develop gradually into a social group that is separate from the younger worker.   Increasing physical and mental limitation associated with advancing age, make it difficult for such people to work safely and competently thereby maintaining previous levels of performance.   At the stage of retirement, the worker’s output reaches diminishing returns.   It becomes necessary for the worker to stop working if his employer wants to minimize loss although not everyone would welcome the idea of retirement even with a generous pension.  

        Retirement as defined by J. A Donnelly et al (1992 : 326), is the changes in job situation whereby the individual gives up his job when diminishing returns set in.  Eze (2001 : 15) explained retirement as the stage where the employer is dissatisfied by the job performance of the employee.

        The German Chancellor, Otto Von Bismarck in the 1880’s started the concept of retirement.   His public pension plan supported a retirement age of sixty-five years.   Insurance companies began to use that retirement age in planning retirement and annuity programmes.   Though the retirement age vary in countries and organizations, Nigeria operates one of the most generous pension schemes in the world.   After ten years of service, an employee qualifies for pension.   An employee could then retire and enjoy the rest of his active life.   Result of Nigerian pension scheme is that the public service is seen as being more lucrative in terms of a persons work life.

        At the period of retirement, it is important that the future life of the worker be considered by planning for his welfare.   This means to pay a consideration that will help the worker to go on with life.   Several reasons have been given for the need for such compensation.  Prominent among the reasons is to provide economic security for the employee at retirement.  Secondly, it guarantees the willingness of the younger generation to work and also see the organization as a good place to work in.  

The compensation paid to the worker at retirement is known as pension.   It is a contractual payment between the employer and the employee.   The employer, after retirement, pays a stated sum of money periodically7 over a stated period to the retired employee (Jerry et al; 1992 : 333).   

        This money, as envisaged by economic planners, will then fulfill the three basic needs for the payment of pensions, which prominent among them is economic empowerment. Economic empowerment, through the payment of pensions is intended to be used in social welfare programmes whereby the worker that is retired is expected not to depend on the society for his livelihood.   It is on this note that the federal government of Nigeria established the state pension scheme under decree 102 of 1979, which decreed that pensions be paid to retired workers effective from 1st April 1974.

        The decree put pension board under the department of establishment/pensions of the Nigerian public service.  The department then instructs the ministry of finance to pay.   Precisely, the pension boards are to see, principally, to the welfare of the workers in the public service.   The objectives for setting up these boards are not short of the objectives mentioned earlier about the reasons for the compensation of retired workers.

        It is also apparent that the downfall of any organization is never far from mismanagement.   It is therefore of great importance to carryout a study on the management of pension scheme in Nigeria to find out the lapses.

        The need for the study can be linked to economic empowerment, restoring the dignity of the worker and creating a place for the younger generation.   The government is seen here, as the employer while the public servant is the employee.   The study will concentrate on management of the schemes and the areas of shortcomings.   This is important because Osuagwu (2002 : 12) have observed that bureaucratic bottlenecks are hindrances to management of pension schemes.       He however contended that dwindling resources is not short of the reasons for such problems.   This research will investigate the government and the pension managers to ascertain the origin of the problems.


The issue at the back of government mind while establishing the pension scheme is to provide the employee with a means of securing on retirement a standard of living reasonably consistent with that which they enjoyed while in service (Osuagwu, 2002 : 1).   Several years later, we can see that the reverse has been the case.   The worker dreads retirement, just like death.   In developed countries, the worker looks up to retirement.   The reasons for these are not short of mismanagement.

The management of pension schemes has made things so hard for the worker that a retiree has to travel long distances to get his pension paid.   It has been observed that those who are retired, while pursuing pension papers in Abuja or Lagos end up running out of cash to sleep under bridges, railways station, post offices, churches and mosques.

The Head of service of the federation Dr. Yayale Ahmed while addressing pension desk officers said, among other things, “pension schemes in Nigeria have become inefficient mainly due to inadequate funding, ignorance of employers, mismanagement of funds and gross indiscipline of pension managers”.   The effect of those to our economic development could be very drastic.   That is why this research is intended to suggest solution to the problem of mismanagement of pension schemes as a hindrance to the fight against bribery, corruption and also the mores for national development.   This research deals secondarily with the problem of weak financial base as the most delimiting factor, towards the management of pension schemes.


Government are working hard to see that retirees receive their pensions regularly and when due, this is why they (the Government) established pension schemes in Nigeria/Corporation that manage pension funds.   There are also some problems which the study will be concerned with.   This includes:  

  • To investigate weather non-payment of pensions can be blamed on the politician or on the economic situation of the country, which might leave government with little money to spend.
  • To explore the flow of workers that retires with the flow of funds from the ministry of finance.  
  • To investigate how concerned government is in terms of having a special monitoring and evaluation unit to check on the excesses and shortcomings of pension managers.
  • To establish a relationship between the non-payment of pension and unwillingness to relinquish office after reaching retirement age.
  • To find out the extent of bribery/corruption in pension management.
  • To make necessary recommendations on these problems.


This study will highlight the need for re-organization of the pension scheme with a view to adopting more dedicated and rational approach, in order to avoid the incessant verification and identification parades which has lead to the sudden deaths of pensioners while waiting to collect their pension. 

        The study will also proffer solution on how to stop the nefarious situation in which almost everyone in government thinks of how best he can embezzle public fund while he can rather than wait for an ingrate future administration to take care of them when their limbs and muscles would have weakened.

        The study will also address the issue of abandonment of pensioners and military veterans, who served the country at their old age when they richly needed our love, support and above all respect.

        It also helps to broaden ones knowledge base.   The studying of management of pension scheme in Nigeria gives the researcher the opportunity to widen her knowledge on this particular research problem.   It enables her to have a deeper insight into the problem under investigation.   This knowledge can greatly help her to better define the research problem and then plan how she would go about the study.


 BUREAUCRATIC:    This is derived from the word bureaucracy.    Bureaucracy is an organization that is made up of people, strictly ruled by a set of rules and regulations.   Bureaucratic is used to portray conservatism.

DECREES:       These are laws made by a despot.   It is the way of making laws in military government.  The laws made by the highest ruling body during a military regime are known as decrees.

DIMINISHING RETURNS:      The law of diminishing returns states that as more of a variable factor of production is added to a fixed supply of land, a point will reach when average output will diminish.   This necessitates the retirement of old sapped workers to make room for the younger generation.

EXCLUSIVE LIST:      The laws of the Federal Republic of Nigeria stipulate how the three tiers of government will share powers.   However, the Federal Government has areas of power exercise, which the states can also concurrently exercise.   In such are as where the state cannot exercise power, the power belong EXCLUSIVELY to the Federal Government.   Such power are contained in the exclusive list.

HEAD OF SERVICE:        The Head of Service is the most senior civil servant in the country.   He is at the head of the service of the federation.

MAN/HOURS:      Man-hours mans a work divided by the working hours, which is a system of measurement used to calculate the output of labour.

MANAGEMENT:       Management is the process of combining or of allocating an organization’s input (men, materials and money) by planning, organizing, directing and controlling for the purpose of producing outputs which could be in the form of good and service so as to attain organizational goals (Akpala; 1990 : 3).

ORGANIZATION:      An organization is the working together of two or more people in a set of objectives to arrive at a goals (Stone; 1992 : 4)

PENSION ACT: The pension act is the enabling laws of the Federal Republic of Nigeria that brought the pension schemes into existence.   The enabling act is decree 102 of 1979.

PUBLIC SERVICE:      Schedule 20 of decree 102 of 1979 listed all the organizations decreed as public services. The public service is government establishments that include statutory corporations and the civil service.


Akapala .A. 1990) Management, An Introduction and

the Nigeria Perspective, Enugu:  Department of Management, UNEC Enugu.

Donnelly, J. A. (1992) Fundamentals of Management

U.S.A; Richard Iron Publication.

 Eze F. O. (1999) Personnel Management II, Enugu:  

Department of Public Administration IMT, Enugu.

 Osuagwu S. U. (2002) Legal Framework in Public

Service Pension Administration and Management Abuja Office of the Head of Service of the Federation.

 Stoner J. A. F. (1992) Management; New Delhi: 

Prentice Hall Ltd.

 Terry R. G. (1972) Principles of Management;

Illinois; Richard Iron Ltd.