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The Role Of The Lagos State Pension Commission Accounting

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Prior to the Pension Reform Act of 2004, the pension system in the Nigerian public service was characterized by many statute laws and disposal was through a centralised system. The new pension strategy is conducive and provinces can voluntarily hold an tantamount strategy. The Lagos State Government, in March 2007, established the contributory pension strategy for all employees in the public service, local authorities council, third establishments, and all State Government parastatals. The State established the Lagos State Pension Commission to administrate the new strategy.

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Pension is a fund set aside by an employee or an employer or both from net incomes towards an employee ‘s retirement ( Cowdell, 2000 ) . Pension reforms are a uninterrupted procedure dictated by economic and political state of affairss of a peculiar state. Pension strategy in about every state has undergone major alterations in several states ( Ahmad, 2006 ) . Pension issues have generated arguments in the countries of support, plus direction, and expense of benefits. A pension strategy is either a defined part program or a defined benefits program.

A defined part program is a fixed part rate where the retirement benefit is variable and depends on the return on investing. The defined benefit program sets a per centum of the concluding norm salary and part varies harmonizing to the per centum of the mean compensation received during the first three gaining old ages of the donee ( Owojori, 2008 ) .

Lagos State has the largest population in Nigeria, and is the largest employer in the state after the Federal Government. Therefore, Lagos State is feasible for an appraisal of the disposal of the new pension strategy. Despite the reform, there are still some built-in jobs and issues confronting the Lagos province pensionaries, and current employees.

This survey assesses the function of Lagos State Pension Commission in the disposal of the conducive pension strategy in Lagos State. The Lagos State Government enacted the Pension Reform Law in 2007 ( PRL ) as a response to the Federal Government ‘s Pension Reform Act of 2004 to replace the Defined Benefit ( Pay-As-You-Go ) system with a contributory pension system. Lagos State was the first province to to the full implement this strategy and the Lagos State Pension Commission ( LASPEC ) was established to supervise pension activities in Lagos State. LASPEC was established and empowered through an enabling Law to oversee and supervise activities of all pension activities in the State. The Commission besides has regulative powers to manage pension fund disposal. Specifically, this research answers the inquiry ; What are the successes and challenges faced by LASPEC in the disposal of the new pension strategy in Lagos State? This research seeks to place the challenges of administrating the conducive pension strategy in Lagos State. Information obtained from research would supply some solutions and waies on how to hike public presentation, trust, and increase engagement in the new strategy.

The Lagos State Pension Commission

The Lagos State Pension Reform is in line with the Federal Government ‘s pension reform, a going from a non-contributory Pension Scheme. The Lagos State Pension Commission presently operates under an executive direction as provided in the new State Pension Reform Law of 2007 ( PRL ) . The new strategy provides pension for all employees of the Lagos State authorities at all degrees. The Lagos State Pension Commission ( LASPEC ) has the duty of managing all pension affairs related to all public employees of the Lagos Government. LASPEC was established and empowered through an enabling Law to oversee and supervise activities of all pension offices in Lagos State. The Commission besides has regulative powers to manage pension fund disposal. The PRL of 2007 expressly states the power of the Commission which ensures its equal liberty to move freely in the protection of the involvements of both employers and employees. The PRL of 2007 expressly states the power of the Commission which ensures its equal liberty to move freely in the protection of the involvements of both employers and employees.

In add-on to a Secretary/Legal Officer, the Executive Management comprises four ( 4 ) specialised sections of the Commission for seamless operation and they are Technical, Administration, Inspectorate and Finance & A ; Investment. The Technical section is responsible for the showing, enrollment, and all other activities of PFAs. The section besides formulates standard demands and process for processing of retirement benefits ; it besides designs and coordinates activities and operations towards issue of Pension Redemption Bond ( in regard of past benefits/accrued pension rights ) , including supportive background informations for each bond issued. Additionally, the section is responsible for interceding with adviser statisticians and reviewing of actuarial studies for the Commission ‘s acceptance and execution by the Lagos State Government, and with authorities bureaus on operational affairs related to pensions.

The Administration Department is responsible for the care and direction of the pension informations bank ; client attention which includes the constitution and care of a Help Desk to go to to questions and ailments on all pension related affairs ; and public enlightenment on pension related issues among other things.

The Inspectorate audits pension related activities of Pension Fund Administrators ( PFAs ) , transitional bureaus, parastatals, and third Institutions. It besides receives and investigates ailments against PFAs, recommends and imposes punishments to be enforced for misdemeanors by PFA ‘s and MDA ‘s in Lagos State in line with the proviso of the LASG Pension Reform Act, 2007. The Inspectorate besides liaises with PENCOM on Pension affairs from clip to clip, particularly on audit studies.

The Finance and Investment section implements fiscal policies and processs ; creates and maintains fiscal coverage and tracking system: novices and prepares budget and gross programs for the committee undertakings and corporate coverage ; prepares fiscal studies ; liaises with State exchequer Office on affairs associating to the conducive pension ; ensures payment of appropriate punishments ; reexamine investing scheme of selected Pension Fund Administrators to be in conformity with PENCOM ‘s guidelines on investing of pension financess.

The Legal Department is in charge of all legal issues and besides keeps records and conducts the correspondence of the Commission. It besides follows up on declarations raised at Board meetings and performs all secretariat responsibilities for the Board of the Commission.

The Contributory Pension Scheme ( CPS ) is compulsory for all employees with more than three old ages to their Statutory Retirement after its debut. Furthermore, the strategy is funded by the authorities and the employee, and pension financess are managed and paid by accredited Pension Fund Administrators ( PFA ) . Besides, the State Government presently deducts and remits pensions for employees captured on the State ‘s Oracle Data Base. This comprise staff categorized as Active, that is, those working in the mainstream civil service, secondary school instructors, wellness workers, etc, State Universal Basic Education Board, Nigeria ( SUBEB – primary school instructors ) and LGA ( Local Government Areas and Local Council Development Areas ) .

Additionally, the State Government has paid Accrued Pension Rights ( Redemption Bond ) in 3 ( three ) different batches: the first batch payment is N412,878,986.80 made to 103 retired persons ; the 2nd batch of N887,362,600.56 made to 217 retired persons and 3rd batch payment of N3.5 billion made to 650 retired persons.

Tables 1-5 below are the sum-ups of remittal made from origin, April 2007 to day of the month:

Table 1: Agenda OF REMITTANCE TO THE SIX PFAs FOR APR – December 2007

Calendar month

EMPLOYEE ‘S Contribution

( N )

EMPLOYER ‘S Contribution

Nitrogen

Sum

Nitrogen

APR’07*

69,072,583.02

69,072,583.02

138,145,166.04

MAY’07

65,135,553.61

65,135,553.61

130,271,107.22

JUN’07

64,788,752.10

64,788,752.10

129,577,504.20

JUL’07

63,468,617.66

63,468,617.66

126,937,235.32

AUG’07

63,697,995.51

63,697,995.51

127,395,991.02

SEP’07

63,735,726.00

63,735,726.00

127,471,452.00

OCT’07

63,668,141.31

63,668,141.31

127,336,282.62

NOV’07

66,898,593.03

66,898,593.03

133,797,186.06

DEC’07

63,135,676.59

63,135,676.59

126,271,353.18

Sum

583,601,638.83

583,601,638.83

1,167,203,277.66

Beginning: PENSION ADMINISTRATION DEPARTMENT, LASPEC

*Contributory Pension commenced in April 2007 in Lagos State

Table 1 depicts the equal monthly parts of employees and employers from April 2007 to December 2007. The tabular array has figures from April to December because parts did non get down until April 2007 after PRL was enacted and LASPEC began to run. The figures show that both contributed over 60 million Naira every month numbering half a billion Naira and the sum for the nine months was about 1.2 billion Naira. This was the sum remitted to the six PFAs contracted with LASPEC for investing on behalf of the employees.

Table 2: Agenda OF REMITANCE TO THE SIX PFAs FOR JAN – December 2008

Calendar month

EMPLOYEE ‘S Contribution

( N )

EMPLOYER ‘S Contribution

Nitrogen

Sum

Nitrogen

JAN’08

64,637,579.53

64,637,579.53

129,275,159.06

FEB’08

64,441,853.61

64,441,853.61

128,883,707.22

MAR’08

63,282,348.94

63,282,348.94

126,564,697.88

APR’08

62,967,217.57

62,967,217.57

125,934,435.14

MAY’08

63,303,113.00

63,303,113.00

126,606,226.00

JUN’08

63,629,878.05

63,629,878.05

127,259,756.10

JUL’08

64,194,696.37

64,194,696.37

128,389,392.74

AUG’08

64,130,460.21

64,130,460.21

128,260,920.42

SEP’08

64,996,545.25

64,996,545.25

129,993,090.50

OCT’08

65,256,746.73

65,256,746.73

130,513,493.46

NOV’08

65,300,157.01

65,300,157.01

130,600,314.02

DEC’08

65,270,199.41

65,270,199.41

130,540,398.82

Sum

771,410,795.68

771,410,795.68

1,542,821,591.36

Beginning: PENSION ADMINISTRATION DEPARTMENT, LASPEC

Table 2 shows the monthly part by employees and their employers from January 2008 to December 2008. The sum was about 770 million dollars for employees ‘ part and the same for employers. Entire part remitted to PFAs in 2008 was about 1.5 billion dollars. The difference between 2007 and 2008 could be attributed to the fact that 2007 parts and remittal covered merely 9 months while 2008 covered parts for the whole of 2008 from January to December.

Table 3: Agenda OF REMITTANCE TO THE SIX PFAs FOR JAN – December 2009

Calendar month

NO. OF EMP

EMPLOYEE ‘S Contribution

( N )

EMPLOYER ‘S Contribution

( N )

Sum

( N )

JAN ’09

101,100

242,285,093.12

242,285,093.12

484,570,186.24

FEB ’09

101,501

242,963,893.12

242,963,893.12

485,927,786.24

MAR ’09

101,654

243,664,643.14

243,664,643.14

487,329,286.28

APR’09

101,923

244,150,711.80

244,150,711.80

488,301,423.60

MAY’09

102,108

244,931,629.12

244,931,629.12

489,863,258.24

JUN’09

102,456

246,320,321.54

246,320,321.54

492,640,643.08

JUL’09

102,383

249,525,072.93

249,525,072.93

499,050,145.86

AUG’09

102,807

251,836,882.29

251,836,882.29

503,673,764.58

SEP’09

102,487

251,457,042.52

251,457,042.52

502,914,085.04

OCT’09

103,615

253,382,062.61

253,382,062.61

506,764,125.22

NOV’09

103,645

255,464,281.56

255,464,281.56

510,928,563.12

DEC’09

103,650

256,357,288.33

256,357,288.33

512,714,576.66

Sum

2,982,338,922.08

2,982,338,922.08

5,964,677,844.16

Beginning: PENSION ADMINISTRATION DEPARTMENT, LASPEC

Table 3 shows the figure of employees who participated in the pension strategy and the sum of part by these employees and their several employers in 2009. The parts are four times higher than the old two old ages – 2007 and 2009. Over 100000 employees participated in each month with little addition on the figure of participants every month. There was besides a changeless addition in the parts by both employees and employers which evidently was due to the addition in figure of employees. The entire sum of part by both employees and employers were near to half a billion Naira every month with a sum of about 6 billion naira for the twelvemonth 2009. This is a 500 per centum addition in part from 2007 and 2008. The addition in part could be attributed to the addition in figure of participants or new hires. LASPEC has reached out to establishments and both employers and employees have more assurance in the new strategy and the investing chances and engagement therefore increased.

Table 4: Agenda OF REMITTANCE TO THE SIX PFAs FOR JAN – December, 2010

Calendar month

NO. OF EMP

EMPLOYEE ‘S Contribution

( N )

EMPLOYER ‘S Contribution

( N )

Sum

( N )

JAN ’10

102,708

258,887,671.67

258,887,671.67

517,775,343.34

FEB ’10

102,769

261,628,708.17

261,628,708.17

523,257,416.34

MAR ’10

102,830

264,369,744.67

264,369,744.67

528,739,489.34

APR’10

103,247

267,841,746.07

267,841,746.07

535,683,492.14

MAY’10

103,532

263,457,414.20

263,457,414.20

526,914,828.40

JUN’10

103,001

264,731,303.56

264,731,303.56

529,456,636.62

JUL’10

103,956

266,684,854.00

266,684,854.00

533,369,708.88

AUG’10

104,302

266,443,031.75

266,443,031.75

532,886,027.50

SEP’10

104,646

266,012,293.75

266,012,293.75

532,024,587.50

OCT’10

104,991

267,322,293.21

267,322,293.21

534,644,586.42

NOV’10

105, 001

267,331,101.01

267,331,101.01

534,662,202.02

DEC’10

105,018

267,431,178.37

267,431,178.37

354,862,356.74

Sum

3,182,141,340.43

3,182,141,340.43

6,184,276,675.24

Beginning: PENSION ADMINISTRATION DEPARTMENT, LASPEC

Table 4 shows the monthly part by employees and their employers from January 2010 to December 2010, an increasing tendency noticeable in every component of the tabular array. There was a little addition in the figure of employees which besides translated into the little addition noted in both parts from employees and from their employers severally. The entire sum remitted to PFAs besides increased from the old twelvemonth, 2009.

Table 5: Agenda OF REMITTANCE TO THE SIX PFAs FOR JAN – December, 2011

Calendar month

NO. OF EMP

EMPLOYEE ‘S Contribution

( N )

EMPLOYER ‘S Contribution

( N )

Sum

( N )

JAN’11

104,563

270,528,512.70

270,528,512.70

541,161,588.40

FEB’11

105,939

386,014,189.69

386,014,189.69

772,134,318.38

MAR’11

105,550

383,944,263.51

383,944,263.51

767,994,077.02

APR’11

105,434

382,860,568.60

382,860,568.60

765,826,571.20

MAY’11

104,722

380,582,794.17

380,582,794.17

761,270,310.34

JUN’11

104,523

379,625,816.46

379,625,816.46

759,356,155.92

JUL’11

104,170

382,040,990.95

382,040,990.95

764,186,151.90

AUG’11

106,526

388,708,146.74

388,708,146.74

777,416,293.40

SEP’11

105,519

385,650,331.31

385,650,331.31

771,300,662.62

OCT’11

104,526

382,592,515.87

382,592,515.87

765,185,031.32

NOV’11

104,565

382,768,048.45

382,768,048.45

765,536,096.90

DEC’11

104,383

383,375,249.20

383,375,249.20

766,750,498.30

Sum

4,488,691,427.65

4,488,691,427.65

8,978,117,755.70

Beginning: PENSION ADMINISTRATION DEPARTMENT, LASPEC

Table 5 shows an addition of about 2000 more employees in the first 2 months of 2011 compared to the old twelvemonth, 2010. The addition is besides reflected evidently in the parts from both the employees and their employers. However, parts reduced once more from May to July 2011 which caused a decrease in pecuniary parts from employees and their employers. The figure of participants once more increased in July, but went down in September. It went down even further from October to December 2011. This lessening in the figure of participants did non nevertheless reflect on the sum of money contributed by employees and their employers. Surprisingly, the entire part for 2011 was over 2 billion-Naira higher than the twelvemonth 2010. This survey would look into the grounds for the fluctuations and seek to explicate if the addition is due to the effectivity of LASPEC in the disposal of the Pension Scheme in Lagos.

Table 6: Conducive PENSION SUMMARY REPORT

PFA

NO LASG CONTRIBUTORS

REMITTANCE AS @ DEC. 2012

Entire NO RETIREES

REMITTANCE TILL DATE

Arm

A

3,467,937,181.95

274

3,543,520,853.27

CRU

A

7,053,874,701.34

562

7,192,329,717.50

IBTC

A

17,103,659,409.17

1162

17,463,916,643.19

LEADWAY

A

2,132,940,723.98

106

2,172,603,163.96

NLPC

A

4,880,178,554.13

289

4,978,406,729.59

Trust

A

2,573,841,954.28

214

2,624,772,566.38

A

94,716

37,212,432,524.85

2607

37,975,549,673.89

Beginning: PENSION ADMINISTRATION DEPARTMENT, LASPEC

Table 6 above shows the sum-up of parts. Column I shows the list of PFAs and Column III shows that over 37 million naira was remitted to retired persons as of December 2012 while the current remittal as of March 31, 2013 is close to 38 million naira. This shows an addition in the sum of payments to retired persons in Lagos State.

The Lagos State Contributory Pension Scheme

The PRA of 2004 empowers State Governments to set up the Contributory Pension Scheme. The Lagos State Pension Commission ( LASPEC has a parttime Chairman, a Director General ( DG ) , four ( 4 ) full-time Commissioners and, eleven ( 11 ) parttime members stand foring stakeholders in the State ‘s pension industry ( LASPEC, 2011 ) .

Similar to the National Pension Commission ( PenCom ) under PRA, PRL authorizes the Lagos State Pension Commission ( LASPEC ) to modulate, supervise, and guarantee the effectual disposal of pension affairs for public service employees. LASPEC shops employees and retired persons information in a designated information bank. The direction presently includes: the Civil Service Pensions Service ; the Local Government Staff Pensions Board, and Teachers Establishment and Pensions Office. These three sections oversee issues of bing pensionaries and would discontinue to be after the last pensionary dies.

Contributory Pension Scheme ( CPS ) was introduced in Nigeria in July 2004 to replace the old Defined Benefit ( Pay-As-You-Go ) system. Lagos State was the innovator province authorities to to the full implement the strategy in Nigeria. The soundless thought behind the embracing of the new pension system by Lagos State Government is to give a new rental of life to the destiny of workers in the State. Hence, the constitution of Lagos State Pension Commission by the State Government through the Acts of Parliament

Background to Project and Method

This research is one of the four types of plan rating ; procedure, result, impact and ; cost-benefit or cost effectivity. Process rating is conducted to measure whether a plan conforms to the demands and design of the plan, in add-on to run intoing client or client outlooks. Outcome rating, on the other manus, uses the end products of the plan to find its effectivity while impact rating, a type of outcome rating, compares plan results with what would hold happened without the intercession plan. The 4th type of rating is the cost-benefit or cost-effectiveness analysis, which compares plans end products or results with the costs of set uping and runing the plans ( Olonilua & A ; Ibitayo, 2011 ) . This survey is a procedure rating being conducted to measure whether the new pension strategy in Lagos is run intoing the demands and the design of the strategy in add-on to meeting employers and employees ‘ outlooks.

There is a famine of information available on the disposal of the conducive pension strategy in Nigeria. Available research has been on the elements of the conducive pension strategy but no research has assessed the execution of the new strategy as it relates to its disposal by the assorted entities designated to pay out the pension financess. While some literature has identified funded pensions to increase national economy and develop capital markets, they have besides pointed towards assorted barriers that hinder accomplishing these aims in low-income states. This literature has non been able to offer support for funded pensions in the context of developing states with a GDP every bit low as that of Nigeria.

The Lagos State Pension Commission has made important payments to donees since its origin. Soon, the Lagos State Government ( LASG ) pays monthly pensions to pensionaries who retired under the old Scheme ( PAYG ) . The PAYG Scheme covers the pre PRA 2007 pensionaries and those exempted by the Act. The Transitional Pension Departments ( as provided by the Law ) and other assorted Government Ministries, Departments and Agencies manage this duty.

The chief aim of this survey is to measure the effectivity of the Lagos State Pension Commission ( LASPEC ) in the disposal of conducive pension strategy under PRL 2007.This survey identifies the successes and challenges of implementing the new conducive pension strategy in Lagos State by LASPEC. Consequences from this survey supply a theoretical account and new guidelines to assorted degrees of authorities in Nigeria on how to better the execution of the new Act. The research objectives for this research are:

To look into the challenges of administrating the new strategy in Lagos State.

To compare the challenges in the province with the challenges at the national degree.

Findingss

Using face-to-face interviews and reappraisal of paperss, the findings of this survey show that the execution of CPS has recorded important success in Lagos State, attributable chiefly to the unequal support it continues to have from the State Government and the professionally run executing platform – i.e. LASPEC. However, the new Pension Scheme is still faced with several challenges as enumerated below:

The importance of Lagos State Government ‘s support to the continued success of the CPS in the State can non be overemphasized is really of import for the strategy to be effectual. The timely tax write-off and remittal of the employees and Government part into the subscribers Retirement Salvaging Histories is the pillar that holds the new Scheme and must be maintained.

Additionally, there are still cases when parts for certain months or watercourses are delayed. The Scheme is besides faced with the challenge of non-remittance of Redemption Bond parts created for the support of old pension liabilities. There is still ageless treatments around the obvious spread between bing accrued pension liabilities of the State Government and the statutory 5 % Redemption Bond Provision being set aside on a monthly footing. Available facts have showed that the statutory 5 % of entire monthly employees ‘ emolument is grossly unequal in funding the maturating pension liabilities of the State. Besides, the inaccessibility of an accurate Actuarial Valuation of the exact pension liability of the State Government under the old strategy is a large challenge ; without which it will be really hard or impossible to determine the exact Government liability.

The efficiency of the Scheme is still impaired by the job of slow and long blessing procedure of National Pension Commission ( PENSION ) . The National Pension Commission does non hold the capacity and resources to garner and pull off these sum of informations required. Some of the informations demand are to take stock of working and idle population, place the figure of shade workers, identify those entitled to benefits but non having them, quantify the value of unpaid pension and accumulated rights, develop the baseline for work force and hiring standards, place past service records, and develop an appropriate information system. To intensify this job is the fact that the NSITF has conformity job and have Stationss non connected by the broad country web ( WAN ) .

There are no clear cut path to procuring PENSION ‘s blessing on critical pension affairs as it affects the Commission and our retired persons. These issues include remittals that can non be applied by the PFA ( unapplied fund ) , incorrect remittals of parts, PFAs transportation window etc. The hold from PENCOM ‘s terminal continues to negatively impact the efficiency of the new Scheme in the State. Among the challenges is besides the job of non-compliance by some ministries, section and bureaus of the State Government ( MDAs ) . The ground for their default is chiefly due to inaccessibility of fund for the immense arrears. Other challenges include the questionable accomplishments and competencies of Pension Fund Administrators and the credibleness of both PFAs and PFCs.

These findings are consistent with an early rating of the position of PRA at the national degree by Dostal ( 2010a ) which showed that the reform has non improved the societal security for older citizens employed in the informal sector and some employees may see jobs. Through a theoretical account computation, disposal of pension financess by PFAs has shown negative returns for participants and the institutional design of the pension system may non be appropriate for the strategy ( Dostal, 2010a ) . And existent direction of the pension system through PenCom has weak conformity regulative enforcement.

The new strategy is viewed to be biased towards the younger coevals while the older people have to trust on informal commissariats to last their old age. Dostal ( 2010a ) opined that the PRA of 2004 did non spread out the range of pension commissariats when compared to bing pension strategies prior to 2004. The Retirement Savings Account performed below the pre-reform degree when it was merely able to make 3.5 million enrollments in the first one-fourth of 2009. This has been attributed to the longer clip it took provinces and local authoritiess to ordain similar reforms. Additionally, private sector employers were loath to fall in the reform because they doubt the credibleness of the new pension strategy ( Dostal, 2010b ) . Noteworthy besides is the fact the international fiscal establishments such as International Monetary Fund ( IMF ) and World Bank did non offer important support for the Pension Reform Act of 2004.

Some of the jobs associated with the new pension strategy are categorized as institutional capablenesss, and single rescuer ‘s involvements. Under institutional capablenesss, Dostal ( 2010a ) identified limited regulative capableness, hapless informations assemblage and direction, instability of the banking system, political intervention with investing determinations, bound in the figure of plus categories available for investing, high passage costs in traveling from old unfunded DB system and PAYGO system to funded pensions. Under the single rescuer ‘s involvements, Dostal ( 2010a ) identified the followers: dubious credibleness of future pension promises, unequal returns on low-yielding assets, high direction charges inquiries, high rate of rising prices inquiries returns, and frequent alteration in labour market position inquiries build-up of important amounts in single histories.

Harmonizing to Dostal ( 2010b ) , the Nigerian authorities no longer follows the Chilean theoretical account and argument is switching on how contributed nest eggs could be used for productive investing. Suggestions are being made towards happening alternate future investing chances utilizing pension nest eggs and non direct authorities investing. The function of Pension Fund Administrators ( PFAs ) is questionable since participants in the pension strategy can non acquire clear information on their investing scheme. Some PFA web sites have non been updated in two old ages and they fail to print the rate of their RSA financess at the terminal of each fiscal twelvemonth, 14 out of 26 PFAs provided recent information on their web site ( Dostal, 2010b ) . There is besides the job with the credibleness of the banking system, stock market, and macroeconomic public presentation of how the economic system interacts with funded pension strategy. There is the deficiency of regulative control of the fiscal markets which might interfere with the involvements of the pension fund rescuers in assorted ways. The safety of investings besides poses an issue for the rescuer due to banking crisis and of class, the Nigerian Stock Exchange has fallen by more than two tierces. This leaves merely the Federal authorities bond as the lone safe investing category for the pension system.

Dostal ( 2010b ) argues that none of the original ends of the PRA of 2004 has been achieved. The Federal authorities still owes arrears from old pension strategies making record highs. Besides, the freshly funded strategy has non significantly impacted the development of fiscal markets since most of the assets are held in authorities securities and domestic bank money instruments, and eventually, the macroeconomic credibleness of Nigeria has declined due to issues such as the parceling off of oil income into particular financess. The regulative environment of the Country did non promote interaction between pension reform and economic reform instead the jobs of ordinance within the new system has led to miss of credibleness for the new strategy ( Dostal, 2010b ) .

Casey ( 2011 ) nevertheless opined that recent events do non intend that the PRA of 2004 has failed. The writer refers to funded pension strategies all over the universe and that Nigeria is non singled out, other funded pension strategies have besides experienced major losingss caused by clang in equity markets and those retiring when the market is a low point are more likely to see permanent harm. The Nigerian authorities is researching other utilizations of the part due to limited investing base. One option is to set up a sort of substructure fund which allows pension financess to be invested straight into activities that promote development by publishing long-run bonds. Private sectors can besides function as substructure suppliers by financing their investings through long-run bonds.

An amendment was made to the PRA of 2004 known as the Pension Reform ( Amendment ) Act of 2011. The amendment fundamentally exempts members of the Armed Forces, Intelligence and Secret Services from the application of the new pension strategy. The amendment signed into jurisprudence on April 7, 2011.

Recommendations

Government can mandate engagement by supervising the figure of employees in an organisation so that all qualified employers take part in the new pension strategy.

There is demand for uninterrupted ordinance and strengthening of the institutional construction of the new strategy. The PFAs should be evaluated sporadically and supervised by Pension Commissions such as LASPEC to guarantee conformity. The civilization of supplying monthly statements of histories and on-line entree to subscribers should be imbibed to guarantee answerability and transparent.

There is the demand for more research on how to put up independent cardinal informations direction authorization on how to happen solutions to issues such as puting engaging standards, developing baseline for work force, and basic enrollment system among other things. Some service and rank records would necessitate to be revalidated. There may be need to outsource some of the duties and develop appropriate method of information engineering.

There is the demand for a more effectual manner of organizing activities among the assorted authoritiess and bureaus. It is besides really of import to procure the support of consecutive authoritiess in Lagos State to guarantee the continued success of the CPS.

Cite this The Role Of The Lagos State Pension Commission Accounting

The Role Of The Lagos State Pension Commission Accounting. (2016, Nov 15). Retrieved from https://graduateway.com/the-role-of-the-lagos-state-pension-commission-accounting-essay/

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