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CHAPTER ONE

1.0 INTRODUCTION

The management of Pension Fund in Nigeria is as old as Nigeria itself. Pension fund was introduced by the colonial masters to provide income and security for old age British citizens working in Nigeria upon retirement as a post-retirement benefit to employees. In the view of Adesina (2006:7), Nigeria Legislative instrument on pension matters was the pension ordinance of 1951 which had retrospective effect from 1st January, 1946. In 1961 National provident from (NPF) scheme was established with the legislation to address pension matters n private organizations. Pension is an arrangement of providing people with an income when they are no longer earning a regular income from employment. However, pensions should not be confused with severance pay; the former is paid in regular installments, while the latter is paid in one lump sum. The terms „retirement plan‟ or „superannuation‟ refer to a pension granted upon retirement.

Retirement plans may be set up by employers, insurance companies, the government or other institutions such as employer associations or trade unions. Retirement pension is referred to as retirement plans in the United States, as pension schemes in the United Kingdom and Ireland but in Nigeria, it is popularly known to as pension. Retirement pensions are typically in the form of a guaranteed life annuity, thus insuring against the risk of longevity. In general, the common use of the term pension is to describe the payments a person receives upon retirement, usually under pre-determined legal and/or contractual terms. A recipient of a retirement pension is known as a pensioner or retiree. Pension fund is any plan, fund, or scheme which provides retirement income.

1.1 BRIEF HISTORY OF THE CASE STUDY

The present Zamfara state pension board Gusau has a long-standing history. Pension scheme has underdone various reforms after the first pension ordinance of 1951.The civil service scheme, which was established by the Basic Pension Decree 102 of 1970, has similarly gone through changes that have ended up compounding the problems of pensioners. It is now a common knowledge that payment procedures for pensioner has become very tedious and sometimes, pensioners are often forced to wait for days, months and even years before they could collect their entitlements.

Furthermore, the sharing process of funds between federal and state services and other agencies is also riddled with gross fraud. These factors and manse factors and many more led to the creation of the Nigerian pension Reform Act, which was signed into law by former president Olusegun Obasanjo in 2004. In similar vein, the Zamfara state government created the state pension commission and Zamfara state local government pension board with a view to discharging the same functions enumerated in the pension Act of 2004.

Since the inception of the former administration of Governor Abdulaziz Yari Abubakar, the management of pension scheme in the state has been given due attention and close supervision, with particular focus on the local government pension board. Investigation carried out at the pension board over the payment of pensions and gratuities to the retired local government workers, indicated that effort put in place by the two arms of governments in the state to develop and promote quality in the civil service under the leadership of Yari Abubakar, and are yielding fruits.

The local government pension board of Zamfara state under the leadership of a good and upright Executive Secretary, Alhaji Jibril Muhammad mafara, has greatly reversed the ugly trends in the payment of pension benefits. A unit under registry department, this unit started function in January 2004 to date.

Its functions as follows:

It process claims of both debt and retired staff of the polytechnic for payment to an insurance company.

2 It enrolls its entire staff that may retire for service.

3 It prepares staff nominal roll of the Zamfara State workers.

4 It compiles and processes all staff list for the group like insurance.

5 It also involves in all pension administration relating to pension matters.

6 It liaises with the following organization in carrying out its primary assignments.

National pension commission
State Ministry of Education (Pension department)
Office of the head of service
State Ministry of finance (budget office or department)
Bureau for Public service reform office
Pension forms Administrators.
NBTE (National Board for Technical Education).

1.2 BACKGROUND OF THE STUDY

In recent times, most of the organizations in Nigeria emphasized on saving a certain percentage of the income for provision after service covered by the public retirement pension. The law made it compulsory for all employers in Nigeria to engage in this occupational pension. However, the principle of pension documentation and services are still the same in some regions over a long period of time. The aim of the pension system is to expedite consumption equalization by making mandatory provision for the future after service (Olatunde & Onyinye, 2014; Nervin, 2016). The Pension scheme fund in Nigeria can be dated back to 1950s before the country independence. The first scheme was established by the pension ordinance in 1951. In 1961, the National Provident fund was introduced and followed by the Armed Forces Pension Act in 1979. The introduction of this act resulted in the establishment of the Local Government Staff Pension Board in 1987. In 1993, the National Social Trust Fund was introduced to replace the pension scheme (Musa, 2014). The Nigerian workers continue to operate this system of pension fund until 2004 when it was replaced by Reformed ACT (Pension Reform Act, PRA 2004) which covers only the employers in the Federal Capital Territory. By this act, it was made compulsory for both workers in the private and public sector to plan for the future after retirement. After a decade to this period, the Nigerian government introduced another act that made it mandatory for the local and state government to benefit from the pension scheme (Nervin, 2016). However, despite the dynamics in the pension schemes in Nigeria, the management and administration still continue to be one of the vital issues for employers after service (Abubakar, 2013; Adesina, 2006; Dalang, 2006). Most of the pension schemes are financed by Pay-As-You-Go (PAYG), which causes some delays and problems in the pension services. According to Barr (2006), an increase in operating cost is one of the detrimental factors to be considered to ensure effective discharge of pension services. This argument was also supported by different scholars in the literature. Few among others include Brooks (2002), Gallaso and Profeta (2003) who stressed that political factor can affect the pension service by increasing the operating cost. Likewise, some scholars related it to economic factors (Madrid, 2003; Simmons & Elkin, 2004) while others related it to demographic factors due to high dependency ratio (World Bank, 1994; Galasso & Profeta, 2003). Consequently, scholars have raised questions about the standard of living, welfare, unemployment and poverty rate (Asaleye, Adama & Ogunjobi, 2017; Asaleye, Popoola, Lawal, Ogundipe & Ezenwoke, 2018; Fashina, Asaleye, Ogunjobi & Lawal, 2018; Asaleye Isoha, Asamu, Inegbedion, Arisukwu, Popoola, 2018). A close observation of many retirees in Nigeria and the problems faced such as late payment, corruption among others have led hardship of many retirees. Also, pension collection and management compared to developed economies is lacking behind (Ahmed & Oyediran, 2013; Barr & Diamond, 2008; Rabalino, 2005; Holzman, 2005). Most of these problems are caused by the manual approach used by the pension fund administrator (PFA), although, some regions in Nigeria have adopted the computerized approach (Casey, 2008). However, in Zamfara State, the manual has been in existence for over a period of time. In this approach, this high probability for human error and encourage mismanagement of resources. This study aims to introduce a system where workers can easily be contacted without the stress of standing in a long queue to be screened. Evidence from empirical review has shown that mismanagement of resources and lack of continuity in policies and reforms have had an adverse effect on growth and development in Nigeria (Asaleye, Olurinola, Oloni & Ogunjobi, 2017; Asaleye, Okodua, Oloni & Ogunjobi, 2017; Oloni, Asaleye, Abiodun & Adeyemi, 2017). Theoretically, the principle of operational efficiency stressed the importance of pension fund after retirement (Campbell & Fieldstein, 2001). In light of the importance of pension service to improve welfare. This study uses the Waterfall model to investigate the collection of the pension fund in Zamfara State, Nigeria. This model allows to review and ascertain if the project is in the right direction and whether to carry on with the project or to abandon the project. The phases are; the requirements; the design; the implementation and unit testing; integration and unit testing; operation and maintenance. This project is important in Zamfara State due to large numbers of employers that have not received their pension after service compares to other States in Nigeria.

1.3 STATEMENT OF THE PROBLEM

The manual method of pension fund management maintains or keeps records in a filing cabinet about each employee/pensioner that is registered with a Pension Fund Administrator (PFA). When an employee decides to open an account with a PFA for the purpose of retirement savings, the former (pensioner) has to go to the physical location of the PFA to obtain and fill a registration form. Upon returning the form, the PFA clerk opens a file for the employee where the filled form and other vital documents as required or that relate to the employee are stored. The file is then passed on to the next PFA personnel to verify the employee’s registration which may take some days if not weeks as the case may be. Using the manual method, the employee is unaware of his/her account balance except if he visits the PFA‟s office. So, in case of financial impropriety in the employee’s account, there is no way he/she can track this. In the manual method, it is a bit cumbersome for the PFA to maintain an up-to-date record of employees/pensioners. When an employee switches job or changes location probably from one state to another, it takes time before these changes can be effected in the employee’s record. All these manual processes have resulted in problems such as:

Theft and fraudulent practices in the process of investing pension funds and the return on investments
2. Human errors i.e., in crediting of a pensioner’s account
3. Wastage of materials such as paper, files and so on,
4. Lack of adequate information flow among PFA personnel.i.e. PFA‟s are unable to give their customers clear information as to what their balance is and what is the estimated amount of money they will be collecting if they retire.
5. The stress of pensioners having to go to PFA‟s office.
A web-based pension fund management system is a system designed to manage pension activities both on the customers and Pension Fund Administrators (PFA) ends. The pension management activities on the part of PFAs include regular update of customers‟ information, crediting of customers‟ account if the customer is retired etc while customers‟ activities include checking their balance online, making enquiries by sending mails, etc.

1.4 AIMS AND OBJECTIVES OF THE STUDY

The main aim of this project is to design and implement a computerized teacher pension verification system for zamfara state pension board. The system has the follow objectives:-

To develop a secure system for staff information.
To analyze the problems facing pension in Zamfara State.
To recommend measures to be taken to tackle the problem faced by the general administration of the pension scheme.
To design a pension management system where teachers’ remittance can be made on an agreed time interval.

1.5SIGNIFICANCE OF THE STUDY

Since every organization wishes to improve on its current status as advances in information Technology is very imminent, the study is therefore to improve society by providing a means of work to demonstrate how the needs of verifying of teacher pension in zamfara state pension board gusau could be met efficiently and effectively through the application of tools and methods made by the new advance in science and technology. It will bring ease, helping the management to make and take decision concerning teacher pension files in time identification and verification.

In the light and problem surrounding pension scheme management in Nigeria, this study is set to achieve among other things the following specific objectives:

To identify the different schemes and how they are funded.
To give an assessment of funded scheme and criteria used.

iii. To identity the strength and weakness of the new pension Reform ACT.

To analyze the problems facing pension record system.
To recommend measures to be taken to tackle the problem faced by the general administration of the pension scheme.

1.6 RESEARCH QUESTION

The following research question is formulated to pilot this research work and they include

Are there any relationship between pensioner and Pension Fund Administrator?
Does the pensioner’s data will only be processed by the computer?
At what percentage does pensioner data generated.

1.7 SCOPE OF THE STUDY

This research will center on promoting the speed of delivery of data, proper storage and also fast way of verifying of pensioners. The system will be equipped with features to help realize the above listed point to the zamfara state pension board gusau and this project is limited to Zamfara State pension board. This program covers only the operation involved in storing pensioner’s and gratuity of every staff for it or qualities.

1.8 LIMITATION OF THE STUDY

The intention of this project is to computerize the present manual methods of records keeping of retirees benefit so as to eliminate hardship of manuals methods of keeping retire records. The new system will aid the organization in handling the difficulties with manual methods and brings about better means of calculating, recording and retrieving pension information and gratuity retirees benefit record easily without difficulties.

1.9 DEFINITION OF TERMS

PENSION: The amount of money paid on a basis to retirees that service for not less than ten (10) year.

GRATUITY: The amount paid to retirees that served for not less than five (5) years.

RETIREMENT: The act of withdrawing oneself from active service in an organization.

RETIREMENT AGE: This official age or length of time of service which no worker is expected exceed in organization.

PENSION ADMINISTRATORS: They are pension scheme managers that are responsible for ensuring that pension scheme operates effectively and sustainably.

PENSION ADMINISTRATOR: They are the persons that oversee the running of a pension Fund.

COMPUTER: Is a device that performs arithmetic and logical operations under program control without human intervention.

Or an electronic device or machine that accept data as input, instruction given to it and produce a solution result as the output.

PROGRAM: Is a set of instructions which enable the computer to perform a specific design operation or task.

PROGRAMMING LANGUAGE: Is a language that computer understand when writing a program.

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Full Project – Design and implementation of a computerized teachers pension verification system

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Full Project – Design and implementation of a computerized teachers pension verification system

Full Project – Design and implementation of a computerized teachers pension verification system

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