DESIGN AND IMPLEMENTATION OF TEACHERS PENSION SYSTEM

IN NIGERIA

(A CASE STUDY OF EKITI STATE TEACHERS PENSION BOARD)

BY

OTIO ALEXANDER IDONGESIT

FPA/CS/15/2-0067

A PROJECT SUBMITTED TO THE

DEPARTMENT OF COMPUTER SCIENCE
SCHOOL OF SCIENCE AND COMPUTER STUDIES
FEDERAL POLYTECHNIC ADO-EKITI
IN PARTIAL FULFILMENT OF THE AWARD OF NATIONAL
DIPLOMA (ND)
IN COMPUTER SCIENCE
 CERTIFICATION

This is to certify that this project was carried out by OTIO ALEXANDER IDONGESIT with
matriculation no: FPA/CS/15/2-0067 under the supervision of Mrs. Idris- Tajudeen for the
award of National Diploma (ND) in computer Science, School of Science and Computer
Studies. The Federal Polytechnic Ado-Ekiti, Ekiti State

___________________ ________________
MRS. IDRIS- TAJUDEEN DATE
SUPERVISOR

___________________ ________________
MR. FELE TAIWO DATE
COODINATOR

___________________ ________________
DR. KOLADE ADU DATE
HOD

___________________
EXTERNAL SUPERVISOR
 ACKNOWLEGEMENT

I wish to express my profound gratitude to almighty God, the alpha and omega of my life who
saw me throughout my periods in the Ordinary National Diploma (OND). My greatest attitude
goes to my pedant, beloved Father, NATHANIEL UKPONG OTIO, who gave me support in
both spiritually, financially, morally, in fact in all aspect of my life, you are one in a million and
to my beloved Aunty Mrs GRACE EYO UDUAK for her support and encouragement in my
education and again my thanks goes to My Mummy ENO UKPONG OTIO also for her support,

My appreciation also goes to my good supervisor Mrs. Tajudeen Idris for her correction,
patience, caring and suggestions and to my coordinator mostly in person of Mr. Fele Taiwo and
My HOD, Mr. Kolade Adu and to the new HOD the person of Mr. Adedara for their relentless
effort in term of good leadership.

Also to all my lecturers in the department of computer science for the knowledge they impacted
in me during my course of study, and those I could not mention here, I say thank you all. I pray
that God will never leave and meet you at the every point of your need, Amen. God bless you
all.

I will also appreciate my friend, my course mate, my brother’s and Olugbenle Oluyinka,
Olatoke Samuel and also to my sister’s Ojo Timilehin, Adebayo Adebolanle and to othes that I
cannot mention all. And again my appreciate goes to my Mother in the Lord, Mrs Ojaomo and
to my Daddy’s in the Lord Pastor Ademola and Pastor Frederick for their spiritual support. I
love you all God you all for me. Thanks

OTIO ALEXANDER IDONGESIT

NOVEMBER, 2018
 TABLE OF CONTENTS

Title Page

Certification

Dedication

Acknowledgement

Abstract

Table of contents

CHAPTER ONE

1.0 Introduction

1.1 Statement of The Problem

1.2 Aim of the study

1.3 Objective of the study

1.4 Research methodology

1.5 Contribution to knowledge

1.6 Purpose of the Study

1.7 Significance of the study

1.8 Limitations of the study

1.9 Definition of Terms

CHAPTER TWO

2.1 The Concept Pension

2.2 Importance of Pension

2.3 The pension Scheme in Nigeria

2.4.1 Merits of the pay as you go(PAYG) Pension Scheme

2.4.2 Challenges of the Old Pension Schemes

2.5 The Pension Reform Act 2004

2.5.1 Features of the 2004nPension Reform

2.5.2 Merits of the Contributory Pension Scheme

2.5.3 Challenges of the Contributory Pension Scheme(CPS)

CHAPTER THREE

Methodologies and Analysis of the Present System

3.1 Introduction

3.1.1 Feasibility Study

3.2 Research Methodologies Adopted

3.3 Design Methodologies

3.3.1 Description of Methodology

3.4 Interface Design

3.4.1 Default Interface
3.4.2 Calculate Pension
3.4.3 Administrator Login
3.4.4 System Dashboard

CHAPTER FOUR

4.0 Implementation and System Design

4.1 System Implementation

4.2 System Study

4.2.1 Feasibility Study

4.2.2 Economical Feasibility

4.2.3 Technical Feasibility

4.2.4 Social Feasibility

4.1 Design Standards

4.2 Output Specification and Design

4.3 Output specification and design

4.4 Program Documentation

CHAPTER FIVE

5.0 Conclusion, Limitations and Recommendation

5.1 Summary

5.2 Conclusion

5.3 Areas & Application

References
 ABSTRACT
This work is aimed at developing a comprised system for quick and easy processing of
the staff pension. The need for such a work was very obvious .
There is partly as a result of pensioners complain on the delay of payment of pension.
Age falsification and forgery of certain document contributed for the computerization of
system
The new system is developed to handle applications in pension processing has been
tasked and certified workable.
 CHAPTER ONE

1.0 INTRODUCTION

BACKGROUND STUDY

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 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:

1. 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 personnels .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.

1.2 AIM OF THE STUDY

The main objective of the study is to design and implement a staff pension management

system. Specific objectives of the study are:

1.3 OBJECTIVE OF THE STUDY

 To develop a secure system for staff information.

 To design a pension management system where teachers’ can easily check to

confirm, calculate and manage their pension alawances.

1.4 RESARCH METHODOLOGY

 Surfing the internet

 Consultation with

 Interview

 Observation

 Review of the existing system

1.5 CONTRIBUTION TO KNOWLEDGE

My contribution to design and the implementation of teachers’ pension system is the

importance of computer to teachers’ pension system virtually all organizations rely on
computer and information technology to conduct business and operate efficiently. Many
institutions, however, do not have the internal resources to effectively design, implement,
or manage the products and systems that they need. When faced with such limitations,
organizations often turn to the computer systems design and related services industry.

Computer training contractors are included in the section on educational services, and
establishments that manufacture computer equipment are included in the section on
computer and electronic product manufacturing. Producers of packaged software and
Internet-based software are covered in the section on software publishers.
Telecommunications services, including Internet service providers, are covered in the
section on

Systems design services firms plan and design computer systems that integrate computer
hardware, software, and communications technologies. They help clients select the right
hardware and software products for a particular project, and then develop, install, and
implement the system. In addition, they often train and support the system’s users. Some
firms in this industry also consult on security issues. The system’s hardware and software
components may be provided by the design firm as part of integrated services, or may be
provided by a third party or vendor.

1.6 PURPOSE OF THE STUDY

How do we then know and expose the capability of computer in problem solving?

Since computer is not a human being and operate on GIGO (Garage In, Garbage out) what is

given is what should be get.

Therefore, it is the purpose of this study to conquer the above mentioned problems

existing in the processing of the staff pension of NIGERIA Pension Board NIGERIA.

It is expected that alter this study, accurate record of any individual involved can

always be maintained. Accurate pension due should always be given with the use for

computer instead of manual. The problem of maintaining first comes, first serve should be

manoeuvre, and lastly age falsifying will become a past.

Finally, it is our goal to computerize the processing activities of NIGERIA PENSION

BOARD; this will quicken the processing rate of pension system.

1.7 SIGNIFICANCE OF THE STUDY

Viewing the processing activities of the payment of pension in Nigeria Staff Pension

Board, it is tedious an uncomfortable task to the workers. Again, the pensioners always

complain of under pension and late payment.

Therefore, this study will lessen the burden in processing of the pension, in the sense

that it will expose the fast rate at which computer works, it will allow the worker to keep

accurate record of an individual. Also, this study will introduce mediation between the
pensioners and worker whereby the pension earns will always be accurate and should always

be paid in time.

1.8 DELIMITATION OF THE STUDY

This study is limited to NIGERIA PENSION BOARD only but can also be use to

other pension board since there is only one rule that guild the processing pension. Although,

these study is based on NIGERIA PENSION BOARD. It does not cover all the areas of

pension. However, it is concentrated on the staff pension. It does not study widow’s pension.

Pension as a result of war disaster.

Finally, this research work is basically for civil servant and Teachers.

1.9 DEFINTION OF TERMS

Joint Tax Board: This is an approved body that monitors the activities of private sector

pension schemes.

Nigeria Social Insurance Trust Fund (NSITF): Provide and enhance social protection to

private sector employees.

National Pension Commission (PENCON): Is an apex body of pension industry in Nigeria

that regulate and supervise the business of pension companies.

National Insurance Commission (NALCOM): It is an independent body responsible for

licensing and regulating insurance companies in Nigeria.

Pension Reform ACT 2004 (PRA): This is the body under the Pension Reform Act 2004

that regulatess the activities of all pension matters.

Pension Fund Administrators (PFAs): they are Private Limited Liability Companies

licensed to manage pension funds under the Pension Act 2004.

Pension Fund Custodian (PFCs): they are banks license to hold the pension fund assets on

behalf of the PFA.

Retirement Savings Account (RSA): This is where the monthly contributions of employees

are kept for safe custody.

Security and Exchange Commission (SEC): These are manages under pension scheme

license to manage pension funds.

 CHAPTER TWO

LITERATURE

2.1 THE CONCEPT OF PENSION

Pension is simply the amount set aside either by an employer or an employee or both

to ensure that at retirement, there is something for employees to fall back on as income. It

ensures that at old age workers will not be stranded financially. It is aimed at providing

workers with security by building up plans that are capable of providing guaranteed income

to them when they retire or to their dependants when death occurs. The reason for pension

scheme stems from the fact that first an organization has a moral obligation to provide a

reasonable degree of social security for workers especially those who have served for a long

period. Second the organization has to demonstrate that it has the interest of its employees at

heart through pension schemes. The most popular way to determine the amount of an

employee’s pension is to base payment upon a percentage of the employee’s earnings

computed at an average over several years multiplied by the number of years the employee

has served the company.

2.2 IMPORTANCE OF PENSION

Pension is a tool used to manage employment. It can be applied in an organization to

attain and retain certain levels of labour productivity. Armstrong (2010) affirms that pension

helps employees to readjust themselves properly into the society after leaving employment.

It constitutes an important tool in the hands of management for boosting employee morale

which may lead to efficiency and increased productivity of employees in particular and the
organization as a whole. Besides pension is a device which employers use to meet their

social responsibilities and thereby attract goodwill.

Furthermore, pension now plays an increasingly important role in the economy of any

country because the money earmarked for pension could be used for the establishment of

small enterprises. It can also relieve pressure on the company for individual assistance by

instilling in employees a sense of confidence at challenging responsibilities for their future.

Sterns (2006) observes that pensions could discourage labour turnover. If both the

employees and employers contribute to the scheme, then it serves as a general area of joint

interest and cooperation and therefore helps to foster better employment relations. However,

employer and employee relationship in the provision of pension as a form of employee

benefits is often affected by factors including: pensionable and gratuity age; the amount or

the percentage of the proposed pension; method of financing; administration of pension and

psychological pressure. Pension administration consists of five basic elements namely:

flexibility; amount of benefits; finance; contribution to cost of pension and gratuity and

death benefits.

2.3 THE PENSION SCHEME IN NIGERIA

Pension reform according to Blake (2003) is not a new issue in any part of the world.

It is usually a continuous process especially with the ever changing economic and political

processes witnessed everywhere in the world. David (2003) affirms that the United Kingdom

which is one of the first countries to introduce the pension scheme has conducted several

pension reforms, the latest being the pension reform under the Labour Government of Tony

Blair in l997.
Balogun (2006) affirms that Nigeria's first ever legislative instrument on pension matters

was the Pension Ordinance of 1951 which took effect retroactively from 1st January, 1946.

Though pensions and gratuities were provided for in the legislation, they were not a right as

they could be reduced or withheld altogether if it was established to the satisfaction of the

Governor-General that, an officer was found guilty of negligence, irregularity or misconduct.

Since the enactment of that first Pension Ordinance, the pension scheme in the has

undergone various developmental stages.

The National Provident Fund (NPF) Scheme was established in 1961 by an Act of

Parliament to provide income loss protection for employees as required by the International

Labour Organisation (ILO) Social Security (Minimum Standards) Convention 102 of 1952.

The NPF scheme however covered only employees in the private sector, and the monthly

contribution was 6% of basic salary, subject to a maximum of =N=8.00 to be contributed in

equal proportion of =N=4.00 each by the employer and the employee. The NPF scheme was

later converted to a limited social insurance scheme established by Decree No. 73 of 1993

and administered by the Nigeria Social Insurance Trust Fund (NSITF).

The NSITF was a defined benefits scheme covering employees in the private sector working

for organisations with a minimum workforce of 5 employees. It catered for employees in the

private sector of the economy with respect to loss of employment, income in old age,

invalidity or death. The initial monthly contribution of members was 7.5% of basic salary,

shared in the proportion of 2.5% by the employee, and 5% by the employer. In 2002 this was

revised to 10% of gross salary (comprising basic salary, transport and housing allowances)

shared in the proportion of 3.5% by the employee and 6.5% by the employer. The proportion
of pension to salaries increased from 16.7 % to 30% between 1995 and 1999. The Local

Government Pension Scheme was established by Military Fiat in 1977. In 1979, the Civil

Service Pension Scheme was established by the Basic Pension Decree 102 of 1979.

Commenting on the provisions of the Decree 102 of 1979, Uzoma (1993) notes that in the

special case of the public scheme the office of Establishment and Pensions acts as the trustee

and constitutes the rules of the scheme. The scheme was for all public servants except those

who were on temporary or contract employment. The compulsory retirement age for such

workers was 60 years for both male and female workers except for high court Judges that

was 65 years and 70 years for Justices of the Court of Appeal and the Supreme Court.

However, the earliest retirement age was put at 45 years provided the worker had put in 15

years of service or more. In the same 1979, the Armed Forces Pension Scheme was created

through Decree 103 of 1979 with retroactive effect from April 1974. Similarly, in the same

year the Armed Forces Pension Act No. 103 was enacted.

There was also the Pensions Rights of Judges Decree No.5 of 1985 as amended by the

Amendment Decree Nos. 51 of 1988, 29 and 62 of 1991. The police and other government

agencies' pension scheme were enacted under the Pension Act No. 75 of 1987. The Local

Government Pension Edict culminated into the establishment of the Local Government Staff

Pension Board in 1987.

Another landmark development in the history of the Nigerian Pension System was the

Police and other Agencies Pension Scheme Decree No: 75 of 1993 which took retroactive

effect from 1990. At this time all governmental parastatals and agencies directly funded by

the treasury had a unified pension scheme that was virtually managed by insurance
companies many of which were unable to honour their pension obligations. In the private

sector, the first pension scheme in Nigeria was set up for the employees of the Nigerian

Breweries in 1954. This was followed by United African Company (UAC) scheme in 1957.

These Decrees remained the operative laws on Public servants and Military Pensions in

Nigeria until June 2004 though there were several government circulars and regulations

issued to alter their provisions and implementations. For instance in 1992, the qualifying

period for gratuity was reduced from ten to five years while for pension it was reduced from

15 to 10 years. In all there have been about eight (8) registered pension schemes in the

country before 2004 which were largely unfunded, self-administered and uninsured.

2.4 THE PAY AS YOU GO (PAYG) PENSION SCHEME

There are two notable schemes the self -administered scheme and the insured scheme.

The self-administered scheme is administered on behalf of the staff by the trustees, in line

with the Trust Deed and Rules. The administrators collect the contributions and invest such

contributions through external or in-house fund managers. For the insured scheme, the

administration of the pension is transferred to a life insurance company who collects the

premium and invests the premium and on retirement, pays the retirees pensions. The most

common form of this scheme is the deposit administration which allows the insurance

company involved to invest accumulated pension fund contributions with subsequent

interest. It is through the use of the insured scheme or the use of pension fund managers that

the private sector managed its schemes effectively before 2004.

Prior to 2004 the pension scheme in operation was the Defined Benefit or Pay as You

Go (PAYG). The government funded the public sector scheme hundred percent and it was a
non-contributory pension scheme. Chilekezi (2005) observes that the pension payment was

done through budgetary allocations for each fiscal year. The private sector scheme seemed

better organized than the public sector and as Uzoma (l993) affirms it was mostly a

contributory scheme, but in a few cases it was maintained as a non-contributory scheme

100% funded by the employers.

2.4.1 MERITS OF THE PAY AS YOU GO (PAYG) PENSION SCHEME

The PAYG pension scheme has certain merits. One merit of the system is that only

the employer contributes and employees do not bear the burden of contributions. Also for

the PAYG scheme there is a general scale of benefit which is more generous than the new

contributory scheme. In addition it involved periodic pension increases with salaries because

monthly pensions were always increased whenever there was a wage increase. More so,

payment by the employer is deferred and there is no immediate pressure on employer's cash

flow as payment is only made after retirement. It is also less expensive to administer since

administrative costs begin from retirement. The scheme is however fraught with challenges

and problems.

2.4.2 CHALLENGES OF THE OLD PENSION SCHEMES

The 2004 pension reform was necessitated by the myriad of problems that plagued

both the Pay As You Go (PAYG) operated in the public sector and other forms of pension

systems like occupational schemes, mixture of funded and defined benefits (DB) schemes

that operated in the private sector. A major challenge of the public sector defined benefit

scheme (PAYG) was its dependence on budgetary provisions for funding. Gbitse (2006)
observes that the scheme in the public sector became unsustainable and was further

compounded by increase in salaries and pension payments.

The corruption and embezzlement in the country also affected the pension scheme and funds

meant for it. Moreover, resulting from lack of adequate and timely budgetary provisions the

scheme became largely unsustainable and brought about not only soaring gaps between

pension fund obligations and revenues, that threatened economic stability but also crowded

out necessary investments in education, health and infrastructure.

In addition, Gbitse adds that the Pension Fund Administrators (PFA) were largely

weak, inefficient, and cumbersome and lacked transparency in their activities. Added to

these was poor supervision of pension fund administrators in the effective collection,

management and disbursement of pension funds. Commenting on the old pension scheme,

Toye (2006) alludes to poor record management and documentation processes by the

pension board as well as the inability of pension fund administrators to effectively carryout

their duties in providing for the expected pension allowances as at when due. The aftermath

of this development led retirees to become more or less beggars.

Successive governments in the country also abused resources meant for development and

payment of pensioners and pensions was largely neglected. The pension burden on

governments at various levels grew so big that prompt payment became impossible. The

problem was further compounded by the negative economic and social effects of the policies

of Structural Adjustment Programme (SAP), hikes in fuel price, devaluation of the naira, and

the global economic recession among others which made the pension scheme

inconsequential.
 The eventual collapse of the non-contributory pension scheme is therefore a

cumulative effect of all these problems that produced generally worsening living conditions

for pensioners. Compared to the 1980s and the 1990s, the pensioners became worse off

because their pensions were significantly depreciated. Added to the foregoing, is the fact that

inflation in the country has for over two decades remained in double digits, a situation which

has undermined and made nonsense of not only the pension, but also the minimum wage.

Therefore aside from the fact that pensions were not paid promptly, when they were

eventually paid their real values had been gulped by inflation.

There were other challenges to the PAYG scheme. For instance it was limited in coverage

since it only covered the public service and a few private organizations. It also lacked

uniformity. There were disparities between public and private sector organizations and even

among various cadres in the same organization. Moreover, the scheme was too generous to

be sustainable. It crowded out other social expenditures in the budget since much was spent

on it to the detriment of demands from other social responsibilities. Furthermore, there were

distortions arising from changes in life expectancy because in reality retirees outlived their

life expectancy by far, thereby putting pressure on budgetary provisions.

Commenting on the pension scheme, Hassana (2008) affirms that most pension

schemes in the public sector had been under- funded, owing to inadequate budgetary

allocations in addition to which budget releases that seldom came were far short of the total

benefits. This situation resulted in outstanding, unprecedented and unsustainable pension

deficits that estimated to over two trillion naira before the commencement of the Pension

Reform Act (PRA) in 2004.

Others like Kunle and Iyefu (2004); Taiwo (2006) also observe that the administration of the

pension scheme was weak, inefficient, and non-transparent. Toye (2006) adds that there was

no authentic list or data base for pensioners, and several documents were required to file

pension claims. The restriction in investment and sharp practices in the management of

pension fund exaggerated the problem of pension liabilities to the extent that pensioners

were dying on verification queues for payments.

The private sector schemes were characterized by very low compliance ratio due to

lack of effective regulation and supervision of the system. Most of the schemes were similar

to Provident Fund Schemes, and did not provide for periodic benefits. More so, many private

sector employees were not covered by any form of pension scheme. Most employees in the

formal and informal enterprises were not catered for by any form of retirement benefit

arrangements. Most pension schemes were designed as resignation schemes rather than

retirements schemes. A direct result of these myriad of problems was that the Federal

Government constituted various committees at different times to look at the challenges of

pension schemes in Nigeria and proffer solutions to move forward. One of these committees

was the Fola Adeola committee whose report was enacted into the Pension Reform Act

(PRA) on the 1st of July, 2004.

2.5 THE PENSION REFORM ACT 2004

In 2004, the Federal Government of Nigeria revolutionized pension management and

administration in the country with the enactment of the Pension Reform Act 2004. The Act

assigned the administration, management, and custody of pension funds to private sector

companies, the Pension Fund Administrators (PFA) and the Pension Fund Custodians (PFC).
The Act further mandated the Nigeria Social Insurance Trust Fund (NSITF) to set up its own

Pension Fund Administrator (PFA) to compete with other PFAs in the emerging pensions

industry, and also to manage the accumulated pension funds of current NSITF contributors

for a transitional period of five years.

As earlier noted, prior to the Pension Reform Act 2004 (PRA), most public organizations

operated a Defined Benefit (pay-as-you-go) scheme in which final entitlement was based on

length of service and terminal emoluments. The system failure gave birth to the new

initiative, Pension Reform Act 2004 with a Contributory Pension Scheme (CPS) to provide

remedy. The Pension Subcommittee of the Vision 2010 (1997) had suggested that (only the

rich (countries) can successfully operate an unfunded, non- contributory pension scheme.

The Vision 2010 committee had set the objective of most Nigerians having access to a

formal social security programme and it argued that this could be achieved by establishing a

funded pension system backed by large-scale privatization.

The major objectives of the new scheme were to: ensure that every person who has worked

in either the public or private sector receives his retirement benefits as and when due;assist

improvident individuals by ensuring that they save to cater for their livelihood during old

age; establish a uniform set of rules and regulations for the administration and payment of

retirement benefits in both the public and private sectors; and stem the growth of outstanding

pension liabilities.

The CPS is contributory, fully funded and based on individual Retirement Savings

Accounts (RSAs) that are privately managed by Pension Fund Administrators (PFAs), while

pension funds and assets are kept by Pension Fund Custodians (PFCs). The Pension Reform
Act 2004 decentralised and privatised pension administration in the country. The Act also

constituted the National Pension Commission (PENCOM) as a regulatory authority to

oversee and check the activities of the registered Pension Fund Administrators (PFAs). The

provisions of the act cover employees of the public service of the federal government, and

private sector organizations.

The move from the defined benefit schemes to defined contributory schemes is now a global

phenomenon following success stories like that of the Chilean Pension Reform of 1981.

There seems to be a paradigm shift from the defined benefit schemes to funded schemes in

developed and developing countries resulting from factors like increasing pressure on the

central budget to cover deficits, lack of long-term sustainability due to internal demographic

shifts, failure to provide promised benefits etc. The funded pension scheme enhances long-

term national savings and capital accumulation, which, if well invested can provide

resources for both domestic and foreign investment.

2.5.1 FEATURES OF THE 2004 PENSION REFORM

The Pension Reform of 2004 has some peculiar features that can position it as a

catalyst for a sustainable social welfare programme. The scheme is fully funded ensuring

that overall retirement income is maintained from the onset of the scheme and also that

retirement benefits are paid on sustainable basis because funds are always available to defray

any pension obligation that falls due. More specifically the following features of can be

identified:
(i) Coverage and Exemption

The scheme accommodates workers in both public and private sector organisations

with a minimum of five employees. Only those who were already pensioners and those with

3 years to retirement as from 2004 were exempted from the scheme. The new scheme applies

only to the workers from 2008. It is however not uniform to all categories of workers. For

instance Section 8 (2) of the 2004 Pension Reform Act exempts judiciary workers from the

new scheme entirely.

(ii) Retirement

While in the public sector, the statutory retirement age is either 60 years or 35 years

of service, whichever comes first, in the private sector, retirement age varies between 55 and

60 years and the factor of 35 years of service is not applicable. The Pension Reform Act

2004 has no clear provisions on minimum retirement age but provides in [Section 3(1)] that

no person shall be entitled to make any withdrawal from their retirement savings account

before attaining the age of 50 years. Section 3(2) (c) however permits withdrawal from the

retirement savings account by an employee who retires before the age of 50 years thereby

accepting that employees could retire before attaining the age of 50. This kind of ambiguity

could result in confusion.

(iii) Gratuity

In the Pension Reform Act, 2004 the right to a gratuity has been abolished. So retirees

no longer receive single lump sum payment as gratuity in addition to pension which is a

periodic payment, normally on monthly basis, for the remainder of the pensioner’s life. This
is seen as being unfavourable to employees and discriminatory against poorer paid

employees.

(iv) Contributory

This privatised and decentralised new pension scheme adopts the Chilean-style of

pension scheme. The scheme provides for a compulsory contribution of 7.5% of workers'

basic salary and 7.5% of same from employers as pension for workers after retirement.

However, while public sector workers contribute a minimum of 7.5% of their monthly

emoluments, the Military contribute 2.5%. The public sector contributes 7.5% on behalf its

workers and 12.5% in the case of the Military. Employers and employees in the private

sector contribute a minimum of 7.5% each. An employer may elect to contribute on behalf of

the employees such that the total contribution shall not be less than 15% of the monthly

emolument of the employees. This implies that the level of contribution is not uniform.

(v) Level and Remittance of Contributions

An Employer is obliged to deduct and remit contributions to a Custodian within 7

days from the day the employee is paid his salary while the Custodian shall notify the PFA

within 24 hours of the receipt of such contribution. There are already complaints by PFAs of

non-remittance of pension deductions on the part of some employers. Contribution and

retirement benefits are tax-exempt. Again, Ahmed (2001) in the Summary of Proceedings of

the National Workshop on Pension Reform reports that the studies which the Federal

Government had commissioned to determine the level of contribution that could meet

anticipated pension benefits report that 25% of gross emolument of all government

employees needed to be set aside annually to meet existing and maturing gratuity and
pension liabilities, for adequate funding of the public service scheme. However, the Pension

Reform Act stipulates a total contribution rate of 15% of total emoluments. This level of

contribution is seems low and inadequate.

(iii) Voluntary Contributions

Section 9 (4) of the Pension Reform Act 2004 allows for voluntary contributions

which gives opportunity for the selfemployed and those working in informal sector

organizations with less than 5 employees to open retirement savings accounts (RSA) with

pension funds administrators (PFA) of their choice and make contributions. However, for

voluntary contributions, the tax relief is only applicable if the amount contributed or part

thereof is not withdrawn before five years after the first voluntary contribution is made.

(iv) Individual Accounts

An employee is required by law to open a ‘Retirement Savings Account’ in his/her

name with a Pension Fund Administrator of his/her choice. This individual account belongs

to the employee and remains with him/her for life even if he/she changes employer or

Pension Fund Administrator. The employee may only withdraw from this account at the age

of 50 or upon retirement thereafter. An employee can withdraw a lump sum of 25% of the

balance standing to the credit of his retirement savings account if he/she is less than 50 years

at the time of retirement and he could not secure a new job after six months from leaving the

last job. Similarly, a retiree can withdraw a lump sum if he/she is 50 years or above at the

time of retirement and the amount remaining after the lump sum withdrawal shall be

sufficient to fund programmed withdrawals.

2.5.2 Merits of the Contributory Pension Scheme

The Contributory Pension Scheme (CPS) has several merits. It facilitates prompt and

regular payment of benefits since funding is made monthly and credited to individual RSAs

immediately.It also ensures availability of fund for investment, particularly to the capital

market. Contributions are put to long term investments in the economy. It involves workers'

participation since an employee contributes to his/her retirement fund and is also at liberty to

decide who manages it.

With the new scheme there is now a central regulator the Pensions Commission

(PENCOM) who oversees all pension matters nationwide. Dalang (2006) notes that there

were three regulators in the pension industry prior to the enactment of the pension Reform

Act 2004. These were the Securities and Exchange Commission (SEC), the National

Insurance Commission (NAICOM) and the Joint Tax Board (JTB). SEC was the licensed

pension manager while NAICOM was and still is the agency responsible for licensing and

regulating insurance companies in the country. The JTB was approved to monitor all private

pension schemes backed up with enabling powers from schedule 3 of the Personal Income

Tax Decrees 104 of 1993.

There is also private sector participation in the management of the scheme which has

introduced profit making into pension administration and services as a check against the

inflationary effects on the contributions.

In addition, there is the portability of the scheme since it is now easier to change jobs. The

employee only needs to provide the new employer with details of his retirement savings

account.
 The new scheme reduces government spending and commitment to payment of

retirement benefit as employees now shares in it. There is less administrative cost to

government because administrative costs are now largely borne by pension funds

administrators and pension fund companies. More so the untimely payment of benefits

which resulted in the accumulation of huge pension liabilities that are yet to be fully settled

in the public sector is now a thing of the past for contributors under the new scheme.

2.5.3 CHALLENGES OF THE CONTRIBUTORY PENSION SCHEME (CPS)

In spite of the seemingly laudable framework of the CPS, it has been characterized by

several challenges.

There was an initial reluctance and scepticism by workers to register with PFAs. While this

has reduced and there is a widening coverage especially in the informal businesses in the

private sector, after almost a decade of inception, the scheme is still characterised by general

misconceptions and knowledge gap.

There is a significant lack of adequate capacity building in the new pension industry

with the personnel in the emerging pension fund industry showing a high degree of overlap

with other business interests. Also insurance companies have scored low on their

performance role in the pension scheme.

Next, there is the transfer of risks to employees. The employee decides who manages

his/her pension contributions and therefore assumes full responsibilities for the risks

involved.

Furthermore, the new scheme was borrowed from Chile but there are significant differences

in the two countries. For instance while in Chile life expectancy is 76, in Nigeria it is about
43 and so majority of the people tend to need their pensions at earlier stages of their lives to

take care of their financial needs and other essential socials services previously taken care of

by government.

Moreover, there is lack of confidence on the part of the employees arising from failures of

previous similar government policies. Added to this is the fear of continuity and

sustainability by successive governments since new governments in the country have been

known to jettison previous programmes midway. Another is the challenge of embezzlement

and mismanagement of the contributions. Recently there have been revelations of multi-

billion Naira pension fund scandals pervading many strata of the Nigerian society like the

Pensions Unit of the Office of the Head of Civil Service of the Federation, PENCOM and

the Nigeria Police Pensions. A recent National Assembly public hearing on pensions

revealed that six civil servants stole =N=24 billion from the Police Pension Funds. The same

persons were alleged accomplices in the illegal diversion of another =N=32.8 billion from

the same Nigeria Police Pension Funds. Similarly =N=151 billion and another £6 million

were recovered after the conduct of Biometric Data Capture exercise on pensioners since

2010. Furthermore, it was revealed that whereas =N=5 billion was paid to the Office of the

Head of Service monthly for pension payment, the actual figure was =N=1.9billion, a

staggering N3.1billion difference.

Corruption in the system has become so pervasive. The embezzlement and corruption

manifests in different shades and colours. Of the 141, 790 pensioners listed on the

government’s payroll, only 70,657 were said to be genuine, while the Police Pensions Office

also allegedly collected =N=5 billion monthly as pensioners’ claims instead of the actual
requirement of N500 million. Millions of pensioners who have served the country have their

latter years enmeshed in suffering due to the greed and avarice of some uncultured public

office holders. Arising from the foregoing, it is questionable whether issuing of shares to

absorb pension savings and the transfer of pension management to private companies, has

solved governance problems and uprooted corruption. Pension Fund fraudsters must be

appropriately sanctioned to serve as a deterrent to others. It is worrisome that rather than

steep sanctions for pension fraudsters there are controversial court judgments which are

more like slaps on the wrists for offenders.

Another challenge is that of regulation. The role of the regulator is bringing in

international best practices into pension administration. The regulator is backed by

regulatory authority, which is the power that the legislation gives it to enforce statutes, to

develop regulations that have the force of law, and to assist the public in ensuring that

regulated entities comply with laws and regulations. However, as confirmed by Herskovits

(2007) there seems to be a pattern of general lack of regulatory autonomy of Nigerian

institutions. With the level of corruption in the country, it is doubtful that one regulatory

body like PENCON could check fraud by PFAs. Pension funds must neither be embezzled

nor mismanaged by fraudulent or incompetent fund administrator due to bad investment

decisions otherwise the major purpose of the scheme will be defeated. In developed financial

and capital markets all intermediaries such as banks, insurance companies and pension funds

are well regulated.

In addition, global financial system is unstable and in a country ravaged by corruption and

system collapse, one can only be optimistic in expecting PFAs to perform wonders. The
current situation in Nigeria is such that businesses are dying as a result of collapsed

infrastructures making it difficult for PFAs to invest these monies. They may subsequently

run into overhead costs arising from administrative and other costs, which may eventually

collapse the scheme. Under the present capitalist economy, recession and financial disaster

are inevitable. More so, bank scandals and rising fiscal deficits do not breed confidence in

the system or the government's ability to deliver meaningful benefits in old age.

Internationally several big banks have been declaring huge losses due to financial

speculations and they are seeking state assistance. In addition, PFAs have been complaining

of non-remittance of 7.5% employers' portion to them.

Again, there is now limited pension payment to new entrants who might not have

contributed much before retirement and as such will only take the little contributions so far

made. The new scheme is not as generous as the old and consequently, it allows limited

redistribution of wealth between age and income groups.

Other challenges include the fact that the CPS seems more complex to administer because its

administration involves monthly computations throughout the life of employment. There are

now higher administrative costs. On the whole, it costs more to administer than the old

system. Also there is no cash flow advantage to the employer because contribution cannot be

deferred by him. The scheme is less flexible for employers who do not control funds

contributed and cannot use it to their advantage whenever there is a need to do so.

Another major challenge is that the new system continues to exclude the poor and workers in

the informal sector. There are serious challenges to implementing the new scheme in the

informal sector arising from the absence of a coherent structure and the unwieldy
composition of the informal sector. Integrating the informal sector into the new scheme is

quite herculean and difficult. There is an all-encompassing need to address the effective and

efficient participation of the informal sector in the Contributory Pension Scheme.

2.6 The Social Pension Alternative

Considering the challenges inherent in both the old and new pension schemes as highlighted

above, possible alternatives to provide for retirees may be imperative. Some have suggested

social pension which involves cash transfer to old people with eligibility based on residence

and financing not from contributions but general tax revenues.

Holzmann and Hinz (2005) and Palacios and Sluchynsky ( 2006) emphasize that the

contribution of social pensions to relieving poverty in developing countries has been long

advocated by the ILO; and more recently, the World Bank. Social pensions have been

credited with positive developments in those countries that have introduced them. Johnson

and Williamson (2006) note that social pensions have contributed to improving women’s

health, fighting rural poverty, heightening the status of older people in the family and

increasing school enrolment.

However, social pensions may not be without disadvantages. In traditional settings like

Nigeria, it weakens traditional systems of informal family care for the elderly. Again it relies

on the same revenue base as the old, unfunded, pension scheme consequently there is

instability of the revenue source, and thus the likelihood of payments falling into arrears,

would remain.
3. The Way Forward

Arising from the foregoing this paper recommends that a comprehensive accounting

standard for retirement benefits must be put in place to adequately protectpension funds.

Government must provide a relatively safe and less volatile area in the Nigerian economy

where the funds can be invested with commensurate returns assured to the beneficiaries.

There is need for continuous regulation and strengthening of the institutional structure of the

new scheme. PENCOM must ensure an enabling environment for smooth implementation of

the pension scheme and put in place effective monitoring of all players backed by adequate

sanctions for erring operators. To ensure transparency and prompt payment there must be

prompt reconciliation and statements of account given to members of PFAs regularly.

Pension fund investment needs to be carefully monitored and investment instruments where

they can be invested must be rated to ensure asset quality. This implies that PFAs must be

competent and proven institutions in financial management and investment. There is need

for viable investment of pension fund to ensure prompt and regular payment of entitlements

of retirees and pensioners. Numerous scandals that have trailed the pension scheme, in recent

times implying that greater need for effective management of the pension scheme. Concerted

efforts must be made to prevent more pension scams in the country.

Furthermore, there must be intensified public education and enlightenment on the new

reform since almost a decade after its inception there is still a lot of misinformation and

ignorance about it. Government needs to demonstrate strong support and political will.

Relevant legal framework should be put in place by government to ensure necessary political

and economic support for the scheme. An appropriate implementation and enforcement
culture is needed which involves prompt prosecution of defaulters and enforcement of

penalties.

Bearing in mind the singular importance of pension in the life of retired workers pension

reforms must be continuous and regularly reviewed to adjust to environmental changes.

There is still hardship due to the unkind and rigorous verification procedures and the

unnecessary length of time it takes for PENCOM to process pensioner’s entitlements.

PENCOM must improve on its services and be open to all enquiries. There is need for more

automation to make the scheme highly mobile and sustainable. There must be a uniform

pension scheme for both the public and the private sectors, and retirement benefits should be

funded by both the employer and the employee. Also, there must be strict regulation,

supervision and effective administration of all pension matters in the country.

 CHAPTER THREE
METHODOLOGIES AND ANALYSIS OF THE PRESENT SYSTEM

3.1 INTRODUCTION

When analyzing an existing system, note is taken on how the existing system works
or the procedures on how jobs and activities are been carried out in the organization. During
system analysis, investigation of an existing system in order to understand its operation is
carried out for better understanding of the existing system and the introduction of more
efficient and economic means of achieving the desired goals is also made.

System analysis is conducted with the following objectives in mind: to identify the
client’s need; to evaluate the system concept for feasibility; to evaluate cost constraints; to
proposed allocate functions to hardware and software, and create a system definition that
forms the foundation for all subsequent engineering work (Pressman, 1997).

The analysis of the present system was carried out to identify the existing problems
affecting the system; this would enable the analyst to validate or invalidate the present
system if many weaknesses were found. The analyst would go ahead in designing the
system that would replace the existing system that must have been proved unsatisfactory.

Before any meaningful progress could be made in system design, a few numbers of
procedures have to be followed in other to guarantee a successful new system. The
procedures include the following;

3.1.1 FEASIBILITY STUDY

In order to determine whether or not a given project is feasible, i.e., to determine

whether the change can be carried out within reasonable time and the properties to be
identified and development of high level model of the proposed system, there must be some
form of investigation into the goals and implications of the project. Three areas are
considered during this analysis, they include;
 (a) Economic feasibility

This involves the study to determine if the cost of developing a system will be lower
than the overall benefits that will be enjoyed after doing so or will be higher in cost based
on the benefit attached to the system to be designed.

(b) Technical feasibility

This part is concerned with the availability of equipments/hardware, software, and

the knowledge of how it will be required when developing a system, that will respond to
user’s request promptly. If the equipment’s, hardware required to develop and design the
system is not available and cannot be easily acquired then, it is not technically feasible.

(c) Behavioral feasibility

This part is concerned with impact the system would make on the social, personal,
and working relationship within the organization. This also concerns the working effect
people would have on the system i.e., reactions of both the computer literates and
illiterates. The investigation or feasibility study is usually carried out by a small team of
systems and management personnel from different levels and departments for an
organization. In some cases, the investigation team may be a group of consultants who do
not really know much about the organization and such investigations may be lopsided or
not very reliable.

These concerns the study of the type of information required by the user and system
in general. The user is recognized to have a scope of the users and the kind of information
needed by the user since the effectiveness of any system is determined by the users‟
satisfaction.

The product of this stage is a formal feasibility study document.

3.2 RESEARCH METHODOLOGIES ADOPTED

The research methodology is the process the researcher used in performing the
analysis of the present system and the subsequent acquisition of data for the designing of
the proposed system, which would replace the existing system.
There are certain methodologies available depending on the software development
environment, the requirements of the user, the nature of the software being developed etc.
Some of the methodologies are as follows:

 Structured System Analysis and Design Methodology (SSADM)

In structured design methodology, the whole project is structured into small, well
defined activities. SSADM also specifies the sequence and interaction of these activities. In
coding aspect, programs are broken into functions and subroutines and there is always a
single entry point and a single exist point into and from each function and subroutine.

 Object Oriented Design (OOD)

In OOD, the conceptual model of the real world problem is developed. This is to test the
design before having to build it.

 Prototyping

Prototyping is the process whereby an incomplete version of the eventual program is

created. This is not the eventual implementation and may be completely different from the
actual software.

However, the researcher in completing this research used the Structured System
Analysis and Design Methodology (SSADM) effectively. The methodology revolves
around the use of the three key techniques namely; logical data modelling, data flow
modelling, and entity/event modelling.

In Logical Data Modelling, the data requirements of the system are identified, modelled
and documented. Data are separated into entities (things about which a business needs to
record information) and relationships (the associations between the entities).
 The Data Flow modelling is the process of identifying and documenting how data
flows within or moves around the system. Data Flow Modelling examines processes
(activities that transform data from one form to another), data stores (the holding areas for
data), external entities (what sends data into the system or receives data from the system),
and data flows (routes by which data can flow) within the system.
While in the Entity Behaviour Modelling business events are identified and related to its
entity with the necessary documentation of each relation at the end of process.

3.3 Design methodologies

Software design is one of the most important steps of software life-cycle, as it
provides the processes for transitioning the user requirements into the system’s
implementation. There are a series of methodologies that can be adopted, which highly
depend on the type of project, team and available resources.
The proposed Teachers Pension system has been developed by following an approach
known as “prototyping”. According to Beaudouin-Lafon , a prototype is “a tangible artefact,
not an abstract description that requires interpretation”. The idea behind this is creating a
series of uncompleted versions of the software, until the expected final solution is achieved.
From the various approaches of this design principle, I have chosen to use
evolutionary prototyping. It implies creating prototypes that will emerge as building blocks
for the final software; therefore, the system is re-evaluated and enhanced after each version
to provide a more functionality or a more accurate performance.

3.3.1 Description of methodology

The proposed solution for the Teachers Pension System is composed of a series of
modules, with well-defined properties and actions that follow sequential processes. If we
look at the system from a high grain perspective, its main attributes are automatically
generating any users pension, it does calculate pension annual amount after providing some
specific information, help monitor Teachers employment record and pension savings
account. The sequence of steps undertaken by the system is depicted in Figure below:
 Administrator
Login

Teachers Record and Pension Account

Processing
Admin Register Automatic Pension
Employee Record Calculator
Information
Employment Record Pension Savings Acct

Administrator Saving and

calculating Employee Monthly
Pension

3.4 Interface design

The system’s GUI has the role of allowing the user to use the available features, rather
than providing extensive and modern software front-end. Being a secondary component, it
has been built as a simple, yet user friendly interface, which integrates all the major
functionalities.
The very first scheme was primitive in terms of features; consisting buttons which allowed
the administrator upload any student information, to generate a file for him/her in any of the
department.
3.4.1 Default Interface:
This interface introduce the system; everything needed to be introduced about the new
system is been showed here. And also display the button to automatically calculate pension
annual amount. This simple segment of the program can be used by any type of user that
finds his/her way into this default interface.

Fig 3.1: System Default page

3.4.2 Calculate Pension
Here, the system provides a drop down menu that enable user to sharply calculate his
or her annual pension:

Fig 3.2 ; Sharp Pension Calculator

3.4.3 Administrator Login;

This interface is the Administrator’s login Menu where private username and
password is provide for login Authentication into the main system.
Fig 3.3 Admin Login
3.4.4 SYSTEM DASHBOARD
The system dashboard is the main module of the Teachers pension system where
every aim of the new system is been perform: it does the registration of employees, it
Perform the CRUD function of new teachers Registered, e.t.c

Fig 3.4 System Dashboard

 CHAPTER FOUR

4.0 IMPLEMENTATION, AND SYSTEM DESIGN

4.1 System Implementation
Implementation is the stage of the project when the theoretical design is turned out
into a working system. Thus it can be considered to be the most critical stage in achieving a
successful new system and in giving the user, confidence that the new system will work and
be effective.
The implementation stage involves careful planning, investigation of the
existing system and it’s constraints on implementation, designing of methods to achieve
changeover and evaluation of changeover methods.

4.2 SYSTEM STUDY

4.2.1 FEASIBILITY STUDY
The feasibility of the project is analyzed in this phase and business proposal is put
forth with a very general plan for the project and some cost estimates. During system
analysis the feasibility study of the proposed system is to be carried out. This is to ensure
that the proposed system is not a burden to the company. For feasibility analysis, some
understanding of the major requirements for the system is essential.
Three key considerations involved in the feasibility analysis are
 ECONOMICAL FEASIBILITY
 TECHNICAL FEASIBILITY
 SOCIAL FEASIBILITY

4.2.2 ECONOMICAL FEASIBILITY

This study is carried out to check the economic impact that the system will have on the
organization. The amount of fund that the company can pour into the research and
development of the system is limited. The expenditures must be justified. Thus the
developed system as well within the budget and this was achieved because most of the
technologies used are freely available. Only the customized products had to be purchased.

4.2.3 TECHNICAL FEASIBILITY

This study is carried out to check the technical feasibility, that is, the technical
requirements of the system. Any system developed must not have a high demand on the
available technical resources. This will lead to high demands on the available technical
resources. This will lead to high demands being placed on the client. The developed system
must have a modest requirement, as only minimal or null changes are required for
implementing this system.
4.2.4 SOCIAL FEASIBILITY
The aspect of study is to check the level of acceptance of the system by the user. This
includes the process of training the user to use the system efficiently. The user must not feel
threatened by the system, instead must accept it as a necessity. The level of acceptance by
the users solely depends on the methods that are employed to educate the user about the
system and to make him familiar with it. His level of confidence must be raised so that he is
also able to make some constructive criticism, which is welcomed, as he is the final user of
the system.

4.1 DESIGN STANDARDS

As the new system is focusing on how to create computerized material procurement

management information system, effort was made to present designs that will suite the
research objectives. So, the design of the software will help the user achieve the following
objectives.
 Have a workable form through which all the inputs will be made to the system.
 Generate a report that will be more meaningful to the management.
 Design of a menu driven program so that the forms will be neatly arranged and
utilized.
 Create a modular programming interface for easy debugging.
  Design a system that will be very fast in operation.

4.2 Output Specification and Design

The output from the new application system is designed in such a way that it conveys
meaningful information to both management and employees. It aims at providing the
management with adequate, effective, well documented up-to- date and formatted output to
help as a tool in planning and decision making.
There are methods of generating reports in the new package. We have both Hard copies and
Soft copies.
4.3 System Requirements
Minimum Hardware Requirements:
Processor : Intel Duel Core.
Hard Disk : 60 GB.
Floppy Drive : 1.44 Mb.
Monitor : LCD Colour.
Mouse : Optical Mouse.
RAM : 512 Mb.
Minimum Software Requirements:
Operating system : Windows XP.
Coding Language : PHP, JavaScript, HTML 5

4.4. Program Documentation

The following steps can be used to install the software locally:
 Install any web server: WAMP or XAMPP
 Past the folder document into the htdoc of the xampp directory or www folder of the
wamp directory which is inside the Disk Drive C of the ny computer.
 Create Database in the local host PHPMYADMIN.
 Then assess the system with any web browser e.g Mozila Firefox, Google Chrome
e.t.c.
 CHAPTER FIVE
5.0 CONCLUSION, LIMITATIONS AND RECOMMENDATIONS
5.1 SUMMARY

Pension provision will continue to grow as individuals begin to place less reliance on
family to look after them in old age and begin to face the reality that they need to look after
themselves by building a nest egg for the future. The success of the pension reforms largely
depends on the sincerity, collaboration and commitment of all stake holders like government
that sets out the regulatory framework; the regulator PENCOM; financial institutions who
manage and administer contributions; individuals who pay and employers who must also
contribute for their employees.

5.2 CONCLUSION

The study of the existing system was done. And the new system designed. The need
for the computerization of the organization was highly emphasized as computer could store,
update, and retrieve information in a manner that no human agent can do. Computer could
always process data and produce accurate and reliable results when given correct data. The
use of computer in pension operations will solve problems encountered in the manual
system. Hence, one could then conclude that the computerization of the Pension activities is
a welcomed development that must be undertaken as it has as advantages;

 The increase in processing speed

 Improved storage facilities and easy retrieval
 Bridge the gap of transporting data with vehicle through the use of computer network.
5.3 AREAS OF APPLICATION
This system will find application in any organisation both private and public
organisation that is interested in pension for the Employees and Employers. The system is
also design in the form that any user of computer can automatically calculate anyone
annual pension.
 REFEREENCES
Ahmed, M. Y. (2001) “Welcome Address at the Opening Ceremony of the National
Workshopon Pension Reforms in Nigeria”, Abuja.

Armstrong, M. A (2010) Handbook of Personnel Management Practice, London:

Kogan page 221.

Balogun, A. (2006): TJ Understanding the new Pension Reform act 2004' Being a paper
Presented at the certified Institute of Nigeria's Membership Compulsory Continuous
Professional Education held at Chelsea Hotel Abuja.

Chilekezi, B (2005): 'Outline of the Reformed Pension scheme in Nigeria.' Lagos

International Training and Educational Services.

David (2003) affirms that the ‘United Kingdom which is one of the first countries to

Introduce the pension scheme’.

Johnson, J. and Williamson, J. 2006. “Do universal non-contributory old-age pensions

make sense for rural areas in low-income countries?”, in International Social Security
Review , Vol. 59, No. 4.

Sterns (2006) observes that ‘Pensions could discourage labour turnover. If both the
employees and employers contribute to the scheme’.

Blake (2003) is not a new issue in any part of the world. It is usually a continuous process

Kunle A and Iyefu, A (2004): "Why pension scheme fail in Nigeria" Abuja. Thisday
 online http//www.globalaging.org/pension/ world/ 2004/ Nigeria.htn.

Chilekezi (2005) observes that the pension payment was done through budgetary allocations

for each fiscal year.

Uzoma (l993) affirms it was mostly a contributory scheme, but in a few cases it was

maintained as a non-contributory scheme 100% funded by the employers.