THE IMPACT OF THE CONTRIBUTORY PENSION SCHEME ON EMPLOYEE RETIREMENT BENEFITS OF QUOTED FIRMS IN NIGERIA

ABSTRACT
This study seeks to evaluate whether or not the Contributory Pension Scheme has an impact on employee retirement benefits of quoted firms in Nigeria and; to determine the relationship that exists between the Impact of the Contributory Pension Scheme on employee retirement benefits and standard of living in Nigeria. The study also assessed the relationship between pension costs and independent variables: total assets and profitability of quoted firms in Nigeria. In line with the objectives, three hypotheses were formulated. The population of the study is the one hundred and eighty-two (182) firms quoted on the first- tier market of the Nigerian Stock Exchange and ten (10) quoted firms selected as sample size based on judgmental sampling. The study utilized data from secondary source. Data were obtained from the annual accounts and reports of the (10) quoted firms that made up the sample of the study and the World Bank data profile on gross national income per capita in Nigeria. The time frame for the study is ten years, covering the period of 1998 to 2007. The techniques of analysis used in the study were the Student’s T-test, qualitative grading, the Pearson Correlation Coefficient and Multiple Regression Analysis. We concluded that even though the Contributory Pension Scheme has positive impact on employee retirement benefits of quoted firms in Nigeria, variation in application still exists among them. The study also established that the ability of quoted firms to fund their pension assets has direct relationship with their assets sizes and respective profitability. The study recommended an effective monitoring/supervision and enforcement of the provisions of the Pension Reform Act, 2004, in addition to effective implementation of the penalties provided by the Act on non-compliers regardless of their status or origin. The study calls on the appropriate authorities such as the government, professional accountancy bodies on academics to commission research and activities geared towards developing not only accounting policies that would ensure swift compliance with Statement of Accounting Standards (SAS 8), but strategies that would ensure optimum investments that enhance net worth and profitability of firms.
TABLE OF CONTENT
Title Page i
Certification ii
Dedication iii
Acknowledgements iv
Abstract vi
Table of Content vii
List of Tables x
CHAPTER ONE: INTRODUCTION
1.0 Background of the Study 1
1.1 Statement of Problem 5
1.2 Objectives of the Study 7
1.3 Research Questions 7
1.4 Statement Research Hypotheses 7
1.5 Scope of the Study 8
1.6 Significance of the Study 8
1.7 Definition of Terms 9
References
CHAPTER TWO: REVIEW OF RELATED LITERATURE
2.0 Pension Scheme in Nigeria: An Overview 14
2.1 Prior Studies on Compliance With Pension Standards 16
2.1.1 Concept of Pension Plans 18
2.1.2 Objectives of Pension Plans 21
2.1.3 Determination of Retirement Cost 22
2.1.4 Pension Costs Recognition and Future Pension Liabilities 23
2.1.5 Concept of Assets 24
2.1.6 The Concepts of Profits 25
2.2 The Emergence of Pension Reform Act 2004 25
2.3 The Objectives of the New Pension Reform 27
2.4 Elements of the New Contributory Pension Scheme 27
2.5 Institutional Framework 29
2.5.1 The National Pension Commission (PenCom) 30
2.5.2 Pension Fund Administrators and Pension Fund Custodians 30
2.6 Investment of Pension Assets under the New Contributory Pension
Scheme 31
2.6.1 The Investment Guidelines 32
2.6.2 The Assets Allocation Structures by National Pension Commission
(PenCom) 33
2.6.3 Risk Management Under the New Contributory Pension Scheme 35
2.6.4 Identifiable Risks 37
2.6.5 Pension Risk Management Operation Process 42
2.7 The Benefits of the Contributory Pension Scheme 43
2.8 The Implications of the Contributory Pension Scheme on Nigerian
Workers 45
2.9 The Challenges of the Contributory Pension Scheme in Nigeria 46
References
CHAPTER THREE: RESEARCH METHODOLOGY
3.0 Introduction 53
3.1 Research Design 53
3.2 Sample Size and Sampling Technique 54
3.3 Nature and Sources of Data Collection 54
3.4 Techniques of Data Analysis 55
References
CHAPTER FOUR: DATA PRESENTATION AND ANALYSIS
4.0 Introduction 61
4.1 Data Presentation and Analysis of The Student T-Test Result 61
4.2 Data Presentation and Analysis of Pearson Correlation Coefficient Result 66
4.3 Data Presentation and Analysis of Regression 69
4.4 Research Findings 76
References
CHAPTER FIVE: SUMMARY OF FINDINGS, CONCLUSION AND RECOMMENDATIONS
5.0 Summary of Findings 80
5.1 Conclusions 82
5.2 Recommendations 84
References