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The research study titled ‘’Pension and Gratuity Administration in Nigeria Problems and solution’’ A case study of Kogi State Pension Board, Lokoja, shows the problems of poor and non-implementation of pension and retirement benefits payment for several years and another problem of delay in payment of pension and gratuity. This research work is written with the objectives to evaluate the problems and to improve the administration of pension and gratuity. Data of this study were collected from primary and secondary sources. The efficiency of the field work from the fourty respondents were validated using statistical instruments known as simple percentage and chi-square method respectively. Findings shows that pension and gratuity can be effectively administered in Kogi State and also indicates that there are problems encountered in the administration of pension and gratuity and that benefits are not being paid to the beneficiaries as at when due. Recommendations were also made that there should be improvement in the administration of pension and gratuity, the staff of the pension board should be well trained to ensure adequate accountability and all retirement benefits should be paid to beneficiaries as at when due.


The importance of pension and gratuity in Nigeria cannot be over emphasized. An evaluation of administration of pension and gratuity generally indicates some militating factor against prompt payment of retirees. Every person employed for several numbers of years would one time be retired of his/her post either voluntarily and be given a name, pensioner or retirees. At that point in time he/she starts collecting meager amount monthly called pension. One is said to be retired if one is not working full time and derives at least the largest portion of his/her financial support from pension payment and this continue until the retiree (ceases to live again (die).

However, the attitude of the beneficiaries over long period of time have called researchers attention to point out problem associated with the system of payment and at the same time suggest valuable solutions to the improvement of the system.

According to the pensions decree No 102 of 1979 section 4 (1) the statutory age of retirement of public servants is 60 years while judiciary officials retire at the age of 65. Consequently, the civil service re-organization decree 43 of 1988 had add the modification that officers should now retire from service on attaining the age of 60 years or 35 years of services which ever that come earlier.

In Nigeria, where the government is the major employer of labour, its policies are adopted by independent industrial and commercial organizations.

The impact of pensions and gratuity is almost universal even if an employee received huge sum of money while on active working service yet income received after retirement will decrease depending on the level he/she retired. And this is done based on the schedule for the computation of gratuity and pensions.


Pension and gratuity scheme in transition economies were used to augment and alleviate the effect of output loss on certain strata of the population and raised income inequality that pervaded the economies.
However, the attitude of the beneficiaries over long period of time have called researchers attention to point out problem associated with the system of payment and at the same time suggest valuable solutions to the improvement of the system.

In Nigeria, government has claimed to be using pension and gratuity system to ameliorate and augment the suffering of her retired public workers.

Pensions and gratuity as a reform of special security against old age, poverty and other uncertainties arouses great interest virtually every where both in developed and developing countries in recent times, pension programmes specially those that are publicity financed and administered have become issue of concern to economist, policy makers and public at large. This is not only one because such programmes are central to the well-being of the pensioners or any elderly, but largely because majority of the pension and gratuity programmes are not balanced (i.e. they are not financially stable) and as such, they are run at deficits, thus making the present values of their future liabilities to be largely enormous (Chard and Jaeges).

At this end, an overview of what pension and gratuity programmes/scheme entails is needed for a general understanding of pensions and gratuity scheme as a reform of social security services.


As it is, without a problem, there cannot be a meaningful research. Many researchers have identified the problem associated with the administration of pension and gratuity in Nigeria and have equally suggested useful solution to the improvement of the scheme.

Such as Ogbomide (2000), there should be a separate account and a particular bank whereby the pensioners will be able to collect their allowance and the bank should be able to keep all.

Gbitse, B. (2004), the staff of pension board should be adequately trained so as to ensure accountability.

However, despite the various pension establishments in terms of structure, power, and functions etc. beneficiaries of this scheme are loudly cried for both poor and non implementation of pension and retirement benefit payment for several years and these acts attracted pension management crisis which by implication on caused social security of the nation.

Over the years experience has shown that payment of pension and gratuity to the retired public officers has been consistent in that the number of people retiring or leaving public sector increased yearly and as such, government bears the burden embedded in the payment to the beneficiaries.

In view of the above, government disbursement on this increase daily making it difficult to have a regular pay to the said beneficiaries, infact, it is viewed at this point that if this could continue without improved procedure and define policies to meet the high demand of increase numbers of retirees, government is bound to face with high tension concerning the large pension deficits and unbalance between the pension contribution and benefit leading to a large pension liabilities.

This is clearly shown that the federal government is not showing the readiness or eagerness to meet the obligation of financing the pension scheme as deem necessary. The inadequacy and inefficiency of government, public pension have resulted into deteriorate well being for pension in Nigeria.

For many pensioners the benefit that accrue to them from the public pension scheme are of advantage in nature as there are also several costs associated with the scheme. To start with, pensioners benefit are to be paid as at when due, some of them have not been able to lay their hands on their entitlement after many years of retirement either due to inadequate pension funds for payment or due to the total omission of their names from the pension beneficiary list. Even when they are to be paid their benefits. Many died on the queue due to fatigue and falling health while waiting at the payment of their pension.

It is true that Nigeria government put in place its pension and gratuity scheme so as to benefit the pensioners such that they are protected against old age, poverty and other old age risks and uncertainty but the availing solution in the country has revealed benefits to pension scheme.
The central objectives of this paper therefore is to evaluate the problems and payment of retirement benefits and the initials purpose for the establishment will be defeated.

Another problem is the omission of some of the retiree’s name on the voucher which cause inconvenience to both the retirees who fall victim and the officer in charge of the preparation of the voucher.

In addition is the time spend after the final approval has been ,ade to have the entitlement collected in liquidity this can also be traced to the office of the Auditor Generals office is a chain of process, and before cheque can be release to the retirees a lot of trekking, transportation, energy wasted, plead have taken place thereby the benefit derived the entitlement would be low due to the ups and down done in the process and this by implication result to death.

The researcher have observed in the Kogi State Pensions Board which is the case study, identified the above problems and have come up with valuable suggestions solution to the problems in existence.


The aims and objectives of this study on the problems and solution of pension and gratuity administration in Nigeria (A case study of Kogi State Pension Board) are as follows:

i. To examine the administration of pension and gratuity in Kogi State.

ii. To examine the various system used in the payment of pension and identifying the best method to be used.

iii. Identify the problems encountered and the defects on the system of disbursement of pension and gratuity in Nigeria.

iv. To suggest means of improving the pension and gratuity scheme in Kogi State.


The significance of this study can be seen from the following:

Project writing is one of the criteria for the award of Higher National Diploma strictly by the Academic Board of Kogi State Polytechnic and this study has broaden the researcher’s knowledge and equally developed her potentials and has revealed by professionalism by stimulating her to further studies.

The study will enhance high productivity amongst workers in public sector because some solution to some problems in the administration of pension and gratuity have been suggested in this write-up if applied, it will improve the living standard of the society and enable workers to have reasonable plans for future understandings.

The recommendation given will be useful to who, which can enhance a great improvement in preparation of retirement benefits and other financial matters.


1. How can pension and gratuity be administered in Kogi State?

2. What are the various system used in the payment of pension and identifying the best method to be used?

3. What are the problems encountered in the system of disbursement of pension and gratuity in Nigeria?


There are two types of hypothesis, the null (Ho) hypothesis and the alternative (Hi) hypothesis.
However, at this stage of the research only the null hypothesis of the study are stated as shows below.

Ho: There is no administration of pension and gratuity in Kogi State

Hi: There is administration of Pension and gratuity can be administered in Kogi State.

Ho: The scheme of pension and gratuity cannot be improved in Kogi State

Hi: The scheme of pension and gratuity can be improved in Kogi State.


The scope of this study is restricted to Kogi State Pension Board but any conclusion arrive at shall be used to infer the pension board.
This project will be restricted to the period of 2004 to 2014.


1. The time constraints did not allow the researcher to visit the library very often and also the pressure of official and class work had restricted the researcher from carrying out further researcher work.

2. The inaccessibility to vital document like personal file, subject file and some important information restricted the researcher from going deep into the root at any research work.

3. Another limitations is inadequate material in the library also limited this project writing.

However, the researcher has overcome the above limitations by consulting the internet for relevant information to this project work. Also, the researcher have visited other public library for more information and materials relevant to this study

1.9 DEFINITION OF TERMS Administration:

This is the management of both human and material resources in order to achieve organizational set goals or objective.
Management: This is the act of putting together of both human and material resources for the attainment of a particular set organizational goal.


This has to do with work that you do in other to earn money for a living.
Retirement: This is the act of retiring from job, or the time when one stop working.

Retirement Plant:

A system for saving money for your retirement, especially if you will not receive money from your employers


Is a proposal or an intention for doing or achieving something.


This has to do with working productively with no waste of money or effort.


This means producing an intended result


This is the final entitlement or a payment made by the state to someone in need.


This can be described as someone who has stopped working, usually because of their age.

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