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
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
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
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
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
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
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
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
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
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
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.