ACCOUNTING FOR PENSION AND GRATUITY IN PUBLIC SECTOR (A CASE STUDY OF ENUGU STATE CIVIL SERVICE)
This study focus on the accounting for
pension and gratuity in public sector. A vivid study of Enugu state civil
service. The study is trying to look into how the problem of Governmental unit
in Nigeria in paying retirement benefits can be solved. The processing and
payment of such benefits in the public sector is also the recognition that this
situation is not going to be an easy one hence it requires immediate and
concerted effort aimed at reappraising the accounting practice involved in
pension and gratuity administration focus that this will ensure a prompt
disbursement of retirement benefit. The researcher constructed some review of
related literature using journal articles, the historical review of accounting, pension and nature of pension and
gratuity were been explained extensively. Data were been obtained through
questionnaire distribution while oral interview were conducted in cases where
the use of questionnaire were administered to scheduled and professional
offices drawn from the auditors, General office, as well as the training and
pension bureau. Analysis was done through simple percentage technique and the
findings were responsible for the report in accounting practices. These
includes documentation of essential service history, falsification of words
ignorance and overlapping of function etc.
TABLE OF CONTENTS Title page
Approval page iii
Table of contents
Background of study
Statement of the problem 6
Objective of study
Scope of the study
Significance of the study
Limitation of the study 11
Definition of terms 12
CHAPTER TWO: REVIEW OF RELATED LITERATURE
Accounting Historical review 15
Pension Historical Review
The Nature of Pension and Gratuity 17
Pension and Gratuity Scheme Design 19
Occurrence of Pension Fraud 21
Defined Benefits Basis 26
Computation of retirement Benefits 28
Notice of retirement
CHAPTER THREE: RESEARCH DESIGN AND METHODS
Area of study
Population of the study 40
Sources of data
3.4.1 Primary sources
3.4.2 Secondary sources 41
Research Instrumentation 43
Validity and Reliability of Research Instrument 44
Method of Investigation 45
CHAPTER FOUR: 4.0 Presentation and analysis of data 46
4.1 Presentation and analysis of result 47
5.0 Summary of Findings Conclusion and
Pension and gratuity is commitment represent
an agreement in which the employer promises to make periodic. Payment or
allowance to an individual because of length service or when certain conditions
A pension plan is a contract between the
company and its employees under which the company agrees to pay benefit to
employees after their retirement. The government management, exports,
shareholders and other users of accounting information are in desperate need to
ascertain whether funds are utilized in compliance with approved accounting
standard and government established financial control mechanism. Moreover there
has been frequent case of exchange of public fund, non-adherence to accounting
principle as regards pension fund administration especially in the public
In addition, in the public sector the funding
of pension and gratuity schemes is done by the federal government of the
federation. It is in line with the foregoing that this research becomes
necessary to make ensuring into the remote cause of delay in the payment of
retirement benefit in the remove the various measure by which pension and
gratuity benefit are accounted for the bureaucracy involved in pension fund to
peruse through the general theory of pension and gratuity.
Background of the study
Pension and gratuity commitment made b
employers to employees are common characteristics of modern employment
agreement. This commitment represents an agreement in which the employer
promises to make periodic payment or allowance to an individual because of some
meritorious work or when certain conditions such as age, length services etc.
Infact, the quest for accountability in both
the private and pubic sectors have really increased the drive for more graphic
information about organization. A pension plan is a contract between the
company and its employees under which
the company agrees to pay benefit to employees after their, experts and other
users of accounting information are in desperate need to ascertain whether
funds are utilized in compliance with approved financial control mechanism.
Besides there has been frequent case of mis-appropriation of public fund,
non-adherence to accounting principles as regards pension fund administration
especially in the public sector.
Nevertheless, in the public sector the
funding of pension and gratuity schemes is done by the federal government of
federation that it is an exclusive preserve of the federal government;
government means that it is derived from statue as pension decree 102 of 1979,
pension right of decree 1985.
This scheme is provided on the pay-as-you-go
basis paid through the intermediaries of the federal government. The state and
local government councils respectively from the foregoing, it is absolute
crystal that as soon as one I gainful employed on pensionable post pension
allowance and gratuity becomes a must as one will book up for it is the end of
ones services period.
Consequently, much appealing as the above
sound it’s operation in the public sector is not without criticism. The plague
being that retirement benefits are not often provides promptly to service the
deserved purposes. Infact it was a
result of this problem that the government decided to decentralized payment of
Nothing can be more frustrating to a retire
than after putting in several years in service he is faced with delegated
payment of his benefit of course, there is no justification whatsoever to
explain the procastination since it does not keep pace with the rate of
inflation or the standard of living of the retiree or even his children’s
Derogatively, it is in line with the
foregoing that the remote cause of delay in the payment of retirement research
to unveil the various measure by which pension and gratuity benefit are
accounted for the bureaucracy involve in pension fund and to peruse through the
general theory of pension and gratuities, organization of pension decree of
1979 and the ministers and extra ministerial department involved in the
disbursement of retiree but also to the pension best/schedule officers of day
who will be the retirees of tomorrows. The study will also be of benefit to the
federal, state and local government who have been and still remains the largest
employers of labour.
Statement of the problems
is convectional statement that problem occurs in all facts of human endevour
including organization. Hence, accounting for pension and gratuity in the
public sector has been great causes of concern to many people even the
authorities who shoulder the responsibilities of payment of retirement benefit.
Hitherto, pension and gratuity was paid in the office of establishment
and management services. But the diverse compliant of delay in the processing and its eventual disbursement, it was
through that problem.
Below will be he most crystal problem in pension and gratuity in the
public sector, what strategies could be employed to relax the bureaucratic
administrative procedure in the civil services.
What measure should be adapted to ensure adequate up to data service
particulars of retire.
What durable strategic options should be applied to all aviate the
economic predicament of present day?
Financially what collaborative methodologies can be adopted in training
civil servants and schedule officers a like in ways of handily and processing
Objectives of the study
The major objectives of this study are as
To know who pension and gratuity are paid to.
To examine the way pension and gratuity are being paid.
To carryout the position of a retiree who is in depth to the government
to his retirement.
To examine the role of auditors in computations and payment of
To know how long it takes someone to retire before pension will be paid
to him or her.
Who are those pension and gratuity are paid to?
How is pension and gratuity being paid?
What is the position of a retiree who is in depth to the government to
What are the roles of auditors in computations and payment of retirement
How long does it take someone to retire before pension will be paid to
him or her?
Scope of the study
The scope of the research work is limited to
the problem involved in accounting for pension and gratuity benefits paid to
retirees who either compulsorily or voluntarily retires from service in the
public sector. It practically explo