Impact Of Pension Fund Management On Economic Growth Of Nigeria

Project and Seminar Material for Economics

Impact Of Pension Fund Management On Economic Growth Of Nigeria


Abstract


This study examined the impact of pension fund management on the economic growth of Nigeria. To achieve this research objective, relevant data were sourced from National Pension Fund (PENCOM) and National Bureau of Statistics (NBS) for the period spanning from 2009-2013. The explained variable is Gross Domestic Product (GDP) proxy for economic growth, Pension Fund Investment (PFI), Income from Pension (IFP) and Pension Welfare (PW) are proxies for pension fund management, the explanatory variable. The study confirms our apriority expectation. The study showed that GDP depends positively on Pension Fund Investment (PFI) and Pension Welfare (PW) and negatively on Income from Pension (IFP), but all the explanatory variables were insignificant at 0.05 level of significant since their SPSS Sign P-value were greater than the chosen level of significant.


Chapter One


1.0 Introduction

1.1 Background of the Study

Business organizations all over the world, whether profit making or non-profit making is made up of either the human element or the material component. These vital parts separate work interdependently for the attainment of the organizational goals. Therefore, for organization to achieve its goals and objectives, the workforce must be duly motivated.

According to Ibe (2012), “The beauty of the struggle of labourer is in the eating of salaries or wages.” He further noted that the privilege of receiving pension and gratuity appear to be the greatest manifestation of the victory of a labourer after a long service to his or her employer.

It is paramount to note that even though the labourer earns wages or salary today, his concern should also be about tomorrow when he is no longer fit to carry on any productive activity. Mohammed (2012), stressed the importance for the average Nigerian worker to look for a pensionable job for stability of the employment contract. The labourer has to look forward to the enjoyment of a favourable welfare package when he leaves employment due to old age. With the institutionalization of pensionable employment, the attractiveness of any employment contract is being judged in terms of whether it is pensionable or not.

Ibe (2012) says the rationale behind any individual entering the labour market is therefore hinged upon the nature of the job i.e. pensionable or non-pensionable jobs and this is governed by a set of parameters that he needs to make some assumption about their future value. They include:

  1. Change in the remuneration of the jobs.
  2. The rate of inflation.
  3. The prevailing interest rate in the economy.
  4. The size, survival, profitability, and future solvency of the employee.
  5. Profitability of major external destabilizing force (pension commission) 2012 pension fund act.

Ahmadu (2012) however frowned at the Nigerian pension scheme. He strongly criticized the pension system as:

  1. Overdependence on budgeting pension.
  2. Weak, inefficient and poor staffing/equipment and administration.
  3. Low compliance level from private sector.
  4. Inadequate pension.
  5. Delay in payment

The above problems therefore increase the call for a better pension fund administration which is service driven and pension oriented. The research work shall focus on the impact of effective management of pension fund in Nigeria economy.


1.2 Statement of the Problem

The Nigerian pension system is bedeviled by enormous problem ranging from the failure of the scheme to contribute basic social security for the aged to the inadequacy of the administrators to effectively invest funds accumulated from pension scheme. The problems faced by the Nigerian pension commission (PENCOM) are as follows: channeling of pension fund to inappropriate investment source. This Ahmadu (2010) noted that Nigerian pension scheme is largely unsustainable due to the poor returns of investment, the proceeds of the pension scheme are not properly managed, the apparent low level of employment offered by the pension scheme. The National pension commission (PENCOM) as the regulatory body was weak in enforcing regulatory compliance, and the non-transferability of pension benefit and poor record keeping. The above challenges vis-à-vis has negative impact on the economy therefore calls for the study.Hence, this research work shall focus on the impact of pension fund management on the Nigerian economy with a view to achieving better service delivery for all pensioners in the nation.


1.3 Objective of the Study

The broad objective of this study is to investigate the relationship between pension fund management and economic growth of Nigeria.

The specific objectives are to:

  1. Examine whether pension fund investment leads to economic growth of Nigeria.
  2. Determine the effects of income from pension on economic growth.
  3. To determine whether economic growth is driven by pension welfare.

1.4 Research Questions

Olannye (2006) defined the research questions as set of questions which the researcher hoped the entire study would answer.

The study seeks to answer the following questions.

  1. Does pension fund investment lead to economic growth of Nigeria?
  2. Does income from pension fund have effect on economic growth of Nigeria?
  3. Is economic growth driven by pension welfare?

1.5 Significance of the Study

The study is expected to build on previous studies in the subject area of pension fund administration. It is also expected to serve as a base for future researcher who may want to drive into this area of study.

It is hoped that this study will help in the reform of PENCOM of Nigeria and to make it more efficient and effective as well as positioning it to global standard. Lastly, it is hoped that it will ensure non-interference of economic and political factors.


1.6 Scope and Limitation of the Study

This research work is centred on the “Impact of pension fund management on the economic growth of Nigeria.” The study covers the performance of National Pension Fund (PENCOM) and National Bureau of Statistics (NBS) for the period spanning from 2009-2013.

In the cause of the study, the researcher encounters some limitations which limited the scope of the study;
Staff Reluctance: In most cases the staff of the used study often feels reluctance over providing required information required by the researcher. This result in finding information where the structured questionnaires could not point out.

Researcher’s Commitment: The researcher, being of full time student spent most of her time on other academic activities such as test, class work, assignment, examination etc which takes average focus from this study.
Inadequate Materials: Scarcity of material is also another hindrance. The researcher finds it difficult to long hands in several required material which could contribute immensely to the success of this research work.


1.7 Definition of Terms

Impact:

Is defined as the action of one object coming forcibly into contact with another or a marked effect or influence.

Pension:

A pension is a fund into which a sum of money is added during an employee’s employment years, and from which payments are drawn to support the person’s retirement from work in the form of periodic payments.

Fund:

Funding is the act of providing financial resources, usually in the form of money, or other values such as effort or time, to finance a need, program, and project, usually by an organization or government

Management:

Management (or managing) is the administration of an organization, whether it is a business, a not-for-profit organization, or government body.

Fund Management:

Funds management is the management of the cash flow of a financial institution. The fund’s manager ensures that the maturity schedules of the deposits coincide with the demand for loans.

Economic Growth:

Economic growth is an increase in the capacity of an economy to produce goods and services, compared from one period of time to another.


Chapter Five


Summary Conclusion and Recommendation

5.1 Introduction

It is pertinent to note that this research was aimed at examining the effect of pension management scheme on economic growth in Nigeria, thus the topic “impact of pension fund management on economic growth in Nigeria”.
In the preceding chapter, the relevant data collected for this study were presented, critically analyzed and appropriate interpretation given. In this chapter, certain recommendations made which in the opinion of the researcher will be of benefits in addressing the challenges associated with pension reform scheme in Nigeria.


5.2 Summary

The findings arising from the data obtained from both primary and secondary sources in the course of this research work are summarized as follows: The challenges and prospect in management of pension fund in Nigeria are

  1. Policy implementation; though has been one of the major challenge there has been prospect and improvement on supervision and regulation of the policy.
  2. Arrears of pension; there are prospect hence most of the arrears has been settled.
  3. Contribution of pension fund; the new act of 2004 allowed both private and public employees to participate and this brought improvement, growth and prospect in the management of pension fund industry.
  4. In assessing management performance on assets investment they were rated good.
  5. Use of biometric system has encouraged staff training, fraud detecting, and accurate debt of arrears to pension fund encourage, growth and prospects to the capital market.

5.3 Conclusion

The study is directed at examining the challenges and prospect of management of pension fund in Nigeria. These challenges which has been identify as contribution, non-availability of records/data, inadequate funding, use of biometric system, incompetent and inexperience of pension staff, uncoordinated administration, perpetual fraudulent activities/irregularities, improper investment of asset fund in a good portfolio, and unimproved bond capital market has witness some improvement and prospect in them. These were presented in the research. The research show that most of this challenges has been from time immeorial but drastic improvement and prospect are witnessed. Management has to speedy up in some areas where they are lacking behind especially on prompt and regular payment of pension. Education as we know is a bedrock of every society but experience are highly needed with good ethics and moral mind to handle issue concerning old people and their funds. No organization in the world can do without finance and fund. Therefore management should adopt the strategy that will move the organization forward and bring life to it.


5.4 Recommendation

Base on the finding and conclusion, the following recommendation are hereby made:

  1. Ethnics and moral standard should be built.
  2. Training and retaining of staff and management of pension fund in Nigeria should be adopted.
  3. More local and foreign seminars, and workshop should be conducted regularly to sensitize both workers, staff, management and pensioners.
  4. An institute/school of pension fund school be established to carry out most of the enlightenment function these to reduce cost of running training programmes.
  5. Prompt and regular payment of pension should be adopted and practiced.
  6. Ghost pensioners should be identified and wiped out.
  7. Adequate investment of asset fund portfolio of pension fund should be maintained.

How To Get The Complete Material For Impact Of Pension Fund Management On Economic Growth Of Nigeria


Project Material Download

3,000 Naira


The Complete Material will be Sent to You in Just 2 Steps

Quick & Simple…


Step One Purchase

Make a Mobile Transfer or POS Payment of ₦3,000 to any of the Account Below

Access Bank PlcAcc No: 0811003731
Samphina Academy
Current Account
Zenith BankAcc No: 1225513212
Samphina Academy
Current Account

Or CLICK HERE To Pay With Debit Card

FOR CLIENTS OUTSIDE NIGERIA
CLICK HERE To Pay With Debit Card ($15)
GHANA – Make Payment of 80 GHS to MTN MoMo, 0553978005, Douglas Osabutey 

Step Two Purchase

Send the Following Details on WhatsApp ( 08143831497) After Payment

  • Payment Details
  • Email Address 
  • Impact Of Pension Fund Management On Economic Growth Of Nigeria

The Complete Material Will Be Sent To Your Email Address After Receiving Your Details
T & C Apply


  Contact Our Help Desk


⚠️ Need a different topic? Perform a quick search



Get A Complete Business Plan For Any Business In Nigeria

Business Plan for Businesses in Nigeria

  Business Plans in Nigeria


Disclaimer


This research material “Impact Of Pension Fund Management On Economic Growth Of Nigeria” is for research purposes and should be used as a guide in developing your research project / seminar work. For no reason should you copy word for word (verbatim) as samphina.com.ng will not be liable for any who copied the material.

The aim of providing this material is to reduce the stress of moving from one school library to another all in the name of searching for research materials. This service is legal because, all institutions permit their students to read previous projects, books, articles or papers while developing their own works. According to Austin Kleon “All creative work builds on what came before”.

samphina.com.ng is only providing this material “Impact Of Pension Fund Management On Economic Growth Of Nigeria” as a reference for your research. The paper should be used as a guide or framework for your own paper. The contents of this paper should be able to help you in generating new ideas and thoughts for your own research. Use it as a guidance purpose only.

Samphina Academy

Samphina Academy is an Online Educational Resource Center that is aimed at providing students with quality information and materials to aid them in succeeding in their academic pursuit.