Comparative Analysis Of The Benefits Of The Nigerian Pension Act No. 102 Of 1979 And The Pension Reform Act Of 2004

The history of pensions in Nigeria started with the 1951 Pensions Ordinance. Between that time and 2004, several types of Pension schemes were legislated or decreed into law by successive governments. In 1979, the then Military Government passed the Pension Decree 102 for civil servants. As a result of the general outcry of the people following the maladministration of the scheme, the Federal Government enacted the Pension Reform Act in 2004 to replace all other existing Pension Schemes. The new pension has been adjudged better than the old one in several respects and is expected to remedy, in particular, the nonpayment or delay in payment of retirement benefits. This paper aims at comparing the quantum of monetary benefits payable to retirees between the old and new schemes. Three different groups of employees with ages spread between 20 and 60, and with different years of service were randomly generated to represent three different organizations. Actuarial methods of estimating benefits using probability, statistics and life contingency mathematics were used to determine and compare the benefits of both schemes. The calculations so far indicate that the ratio of gratuity paid by the old scheme and that of the new scheme is a minimum of about 3.5:1 while the pension benefits stand at the minimum ratio of 2.3:1. The old pension scheme is hence proved better in terms of benefits payable to retirees.