CHAPTER
ONE
1.0 INTRODUCTION
1.1 BACKGROUND TO THE STUDY
The pension and gratuity which are normally goes
to retired employee have been in practice in the advanced western countries,
which gradually came into our under developed countries, since then during
colonial regime.
Pension is a stated allowance or amount of money
paid regularly on monthly basis to a person on his retirement from service.
Gratuity: This is a sum of money paid to a worker
or military personnel on retirement or discharge from service. The amount is
calculated according to the years of service of the individual concerned.
Pension was not therefore the automatic
entitlement of a retiree. However, several reviews have been made to pension
ordinance in 1979, 1992 etc. It was the review of 1993 pension rate that other
fringe benefits from part of total annual emoluments up till now. Such benefits
include utility allowance and meals subsidy as per established circular Ref.
No: 363216/51/X/702 of 25th January 1993.
It is also pertinent to note that all retired
officers (servants) were paid uniformly based on the level of which an officer
retired. But review of 1993 brought a disparity in the amount paid to retiree
officers in the federal and state government.
An evaluation of administration of pension and
gratuity schemes in the public service generally indicates some militating
factors against prompt payment of retirees.
Every person employed originally works for several
number of years up to a specific year, would one time be retired of his post
and given a name PENSIONER or RETIREE at this stage, he starts to be collect
meager amount monthly, collect pension. One is to be retied if he/she is not
working full time and derives at least the largest portion of financial support
from the public or private pension payments. It designate the period in life
when one’s role as a paid worker ceases.
However, the attitude of the beneficiaries over
long period of time has called researchers to fish out problems associated with
the system of payment and equally suggest valuable solution to the improvement
of the system. According to Pension Decree No. 102 of 1979, Section 4(i) the
statutory age of retirement for public servant is (60) while judicial officers
retires at the age of (65). 35 years of service, whichever is earlier.
In Nigeria, where the government is the largest
employer of labour, its policies are equal widely adopted by independent
industry and commercial organization.
The impact of payment of gratuity is almost
universal, even if an employee received large or huge sums of money during his
active working services. Yet income accruing to him after the service will
probably decrease depending on the level he/she retires on. It is pertinent to
note here that retirees are paid based on the schedule for the computation of
gratuity and pension.
If an employee has used his or her job to maintain
self esteem identity and feeling of competence his/her psychological well-being
can be jeopardized by feeling that a valued career is over.
Haddrome and Marizel (1983) observes that a
discruption in job security represents a loss as profound for some individuals
as the loss of a cored one and those employee who loose their jobs need support
in their effort to work through a process of grieving.
This is no less true for people who retire than
those who find themselves suddenly unemployed. It has been generally said and
believed that the basis for the conduct of a research is as a result of the
existence of a problem and the desire to find lasting solution to the problem.
1.2 STATEMENTS OF THE PROBLEMS
The pension administration is characterized by
some inadequacies as a result of mismanagement, corruption and incompetence of
the some pension administrators. This bad situation is a set back to national
development because some pensioners will have to beg for what is rightly belong
to them, unlike what is obtainable in other uncorrupt countries.
However, as mentioned or highlighted above Pension
administration in Nigeria is characterized by some problems some of them are
illustrated.
i)
CORRUPTION: Many pension administrators in Nigeria are in the theory of quick money
syndrome they tend to embezzle money in their possession at the detriment of
the beneficiaries.
ii)
LACK OF COMPETENCE: In competence personnel are often saddled with
the critical task of computing pensions lists and accounts, this will no doubt
result in wrong placement of document and misleading information.
1.3 OBJECTIVES OF THE STUDY
The objectives of the study on the administration
pension and gratuity scheme in the public service and Kaduna polytechnic can be
analyzed as follows:
a) To examine various policies in respect to
the pension payment system in Nigeria.
b) To identify the problems encountered in
the system of disbursement of pension and gratuity.
c) To assess the effectiveness and
efficiency of the administration of the pension scheme in the public services.
1.4 RESEARCH QUESTIONS
i) Does the government introduced good
policies that might bring about systematic change in the payment of pension and
gratuity?
ii) What are the problems encountered in the
disbursement system of pension and gratuity in Nigeria?
iii)
Is there
effectiveness and efficiency in the administration of pension and gratuity
scheme in the public services?
1.5 SIGNIFICANCE OF THE STUDY
The study will be of great significant to both the
staff of Kaduna Polytechnic, the institution itself as well as the general
public.
a) To
the Staff of Kaduna Polytechnic
The study will be significance to the staffs of
Kaduna Polytechnic, since it will bring about some possible solution to their
problems in the administration of pension and gratuity. And also will help them
to prepare effectively before their retirement.
b) To
the General Public
On the part of society in general, this study
could enhance the high productivity among the workers in the public sectors.
Since the possible solution to some problems in the administration of pension
and gratuity have been suggested.
It will be, if applied correctly improve the
living standard of the general public, as this will enable workers to have
reasonable plan for future.
c) To Kaduna Polytechnic
Pension and Gratuity Section
The significance of the study equally extends to
the department of pension and gratuity, Kaduna polytechnic in that, the
recommendation can be of great importance to them which can enhance great
improvement in the preparation of retirement benefits and other office matters.
d) To
the Future Researchers
The study will be significant to future researcher
who will carry out another research on this topic, it will serve as research
materials.
1.6 SCOPE OF THE STUDY
The scope of this research work or study is
restricted to the administration of pension and gratuity in Kaduna Polytechnic
from 2006 to 2011.
1.7 HISTORICAL BACKGROUND OF KADUNA POLYTECHNIC, KADUNA
The Colonial Pension Law was made by
the Governor General of the country. Pension was not therefore, the automatic
entitlement of a retiree. However, several reviews has been made to the pension
ordinance in 1979, 1992 etc. It was the review of 1993 pension rate that other
fringe benefits includes utility allowance and meal subsidy as per established
circular Ref. No: B63216/S.1/X/702 of 25 January 1993.
It is pertinent also note here that all retired
officers (servant) were paid uniformly based on the level of which an officer
retires, but review of 1993 brought a disparity in the amount paid to retired
officers, in the federal and state government.
The Kaduna Polytechnic which was formerly known as
“Kaduna Technical Institute”. It was muted along with the Nigerian College of
Arts, Science and Technology as far back as 1951.
To avoid duplication of courses by the two
institutions the difficulty of retirement of staff and obtaining enough
candidate before the date, the institutions did not take off until 1956,
following the acceptance by the British Government to approve the recommendation
of the Higher education commission which proposed the upgrading of YABA College
of Technical Institute and the need to have Technical Institute in Kaduna and
Enugu. The Technical Institute was to:
1.
Operate
in the field other than the Nigerian College
2.
The
graduates of the Technical Institute were not be trained exclusively.
3.
The
training in the Technical Institute was to cover only such amount of technical
work necessary for engineering assistance (Technician).
4.
The
courses were to lead to the Ordinary National Certificate/Diploma in the United
Kingdom. It was also envisaged that the courses be trained to the standard
equivalent of Higher National Certificate/Diploma while the Nigerian College
with branch at Zaria was established to produce Teachers that will help on
training Rural industries and to keep the North in Higher Education pictures.
The Kaduna Technical Institute was established for
the purpose of running two courses, namely:
a) Junior
Technical Courses: This is Technical Secondary School comparable to
Secondary Technical in England.
b) Senior
Technical Courses: These were to be post-Secondary courses organized in
full time.
In comparison, the Nigerian College of Science,
Arts and Technology offered courses leading to the award full Technology
Certificate for the Associate Membership of the appropriate professional
Institute e.g. A.M.I Mech. E. Elect.
On 21st March 1961, Sir Ahmadu Bello
the premier of the defunct Northern Nigeria discussed with British High
Commissioner Viscount Head and requested the assistance of British government;
the regional ministry of Education with assistance of department of Technical
Co-operation of the United Kingdom sough the services of two men and
commissioned them to study and plan the institute.
The Northern Nigerian executive had at its meeting
and vide its conclusion No. 1 (62) 1962 designated the Kaduna Technical
Institute as Kaduna Polytechnic. The site work for the new C.S.T Building was
started in March 1963 with building of workshop blocks which was completed in
Feb. 1968.
In those days the school have pioneer department,
College of Science and Technology which involve:
1.
Department
of Civil Engineering and irrigation
2.
Department
of Mechanical Engineering
3.
Department
of Liberal Studies
But now adays Kaduna Poliytechnic involved five
units which are:
1.
College
of Science and Technology (C.S.T) located at T/Wada.
2.
College
of Business and Management Studies (C.B.M.S) located at Golf Road U/Rimi.
3.
College
of Administrative and Social Science Studies (C.A.S.S.S) located at Bye-pass.
4.
College
of Engineering (C.O.E) located at T/Wada
5.
College
of Environmental Studies (C.E.S) located at Barnawa.
1.8 DEFINITION OF TERMS
a. Gratuity: This is a sum of money
paid to a worker or military personnel on retirement or discharge from service.
The amount involved is calculated to the years of service of the individual
concerned.
b. Pension: Is a stated allowance or
amount of money paid regularly on monthly basis to a person on his retirement
or to his dependent on his death in consideration to his past service.
c. Disbursement: Refers to payment of
entitlements to the pensioners or retirees.
d. Beneficiaries: This refers to people
whom pension and gratuity are paid after leaving the service or their next of
kin.
e. Pensioners: These are the workers
who leave the service and are eligible to gratuity and pensioners at stipulated
age.
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