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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