CONTRIBUTORY PENSION SCHEME, EMPLOYEES’ GRATIFICATION AND ECSTASY OF SATISFACTION AFTER RETIREMENT: FOCUS ON LAGOS STATE UNIVERSITY OF SCIENCE AND TECHNOLOGY

K. A. BANJO; O. K. AKOSILE; W. A. ALASIRI

K. A. BANJO Department of Insurance and Actuarial science, Lagos State University of Science and Technology, Lagos.
O. K. AKOSILE Department of Business Administration and Management, Lagos State University of Science and Technology, Lagos.
W. A. ALASIRI Department of Business Administration and Management, Lagos State University of Science and Technology, Lagos.

Keywords: Employee Performance, Employee Retention, Pension Reform Act, Compensation Design, Corporate Performance, Nigeria

Abstract

The continuous amendment to the pension scheme is a clear pointer to the fact that the pension scheme has not met the desired hope of employees and retirees. This has attracted the attention of researchers to equally review the likely impact of the pension scheme on employees’ gratification and ecstasy of satisfaction after retirement. A total of 92 members of staff of the Faculty of Management, Lagos State University of Science and Technology were sampled. A structural equation model was used to test the hypotheses of the study. A careful analysis of the study reveals that the new contributory pension scheme has a significant effect on the employees’ gratification and ecstasy of satisfaction after retirement; the 75% withdrawal from the contributory pension scheme has a significant positive effect on the employees’ gratification and ecstasy of satisfaction after retirement; however, the remaining balance of 25% remaining balance of the contribution has a negative impact (-5%) on the employees’ gratification and ecstasy of satisfaction after retirement, meaning that the remaining balance of 25% may not be sufficient to sustain the employees throughout their lives time, hence, this may hasten their early grave. This study recommended that the National Assembly should hasten the passage of the new contributory pension scheme into law; retirees that still have the strength to work after retirement should learn entrepreneurship (while on the job) so that the 75% that will be collected after retirement can be used judiciously for profitable ventures; the body responsible for pension scheme administration should make the 75% withdrawal optional and encourage retirees to evaluate other alternatives before collecting such lumpsum; Management of contributory pension scheme should allow each employee to contribute as to how their funds will be invested; and the employees/retirees should be able to track their funds through the use of a mobile app that will allow employees see how their fund is been managed, where their funds were invested and the prevailing rate of returns. All this will enhance transparency and improve employees’ gratification and ecstasy of satisfaction after retirement.