CHAPTER ONE

INTRODUCTION

1.1 Background to the 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

1
pensioner or retiree. Pension fund is any plan, fund, or scheme which provides retirement

income.

In recent times, most of the organizations in Nigeria emphasized on saving a certain percentage

of the income for provision after service covered by the public retirement pension. The law made

it compulsory for all employers in Nigeria to engage in this occupational pension. However, the

principle of pension documentation and services are still the same in some regions over a long

period of time. The aim of the pension system is to expedite consumption equalization by

making mandatory provision for the future after service (Olatunde & Onyinye, 2014; Nervin,

2016). The Pension scheme fund in Nigeria can be dated back to 1950s before the country

independence. The first scheme was established by the pension ordinance in 1951. In 1961, the

National Provident fund was introduced and followed by the Armed Forces Pension Act in 1979.

The introduction of this act resulted in the establishment of the Local Government Staff Pension

Board in 1987. In 1993, the National Social Trust Fund was introduced to replace the pension

scheme (Musa, 2014).

The Nigerian teachers continue to operate this system of pension fund until 2004 when it was

replaced by Reformed ACT (Pension Reform Act, PRA 2004) which covers only the employers

in the Federal Capital Territory. By this act, it was made compulsory for both workers in the

private and public sector to plan for the future after retirement. After a decade to this period, the

Nigerian government introduced another act that made it mandatory for the local and state

government to benefit from the pension scheme (Nervin, 2016). However, despite the dynamics

in the pension schemes in Nigeria, the management and administration still continue to be one of

the vital issues for employers after service (Abubakar, 2013; Adesina, 2006; Dalang, 2006).

2
Most of the pension schemes are financed by Pay-As-You-Go (PAYG), which causes some

delays and problems in the pension services. According to Barr (2006), an increase in operating

cost is one of the detrimental factors to be considered to ensure effective discharge of pension

services. This argument was also supported by different scholars in the literature. Few among

others include Brooks (2002), Gallaso and Profeta (2003) who stressed that political factor can

affect the pension service by increasing the operating cost. Likewise, some scholars related it to

economic factors (Madrid, 2003; Simmons & Elkin, 2004) while others related it to demographic

factors due to high dependency ratio (World Bank, 1994; Galasso & Profeta, 2003).

Consequently, scholars have raised questions about the standard of living, welfare,

unemployment and poverty rate (Asaleye, Adama & Ogunjobi, 2017; Asaleye, Popoola, Lawal,

Ogundipe & Ezenwoke, 2018; Fashina, Asaleye, Ogunjobi & Lawal, 2018; Asaleye Isoha,

Asamu, Inegbedion, Arisukwu, Popoola, 2018). A close observation of many retirees in Nigeria

and the problems faced such as late payment, corruption among others has led hardship of many

retirees. Also, pension collection and management compared to developed economies is lacking

behind (Ahmed & Oyediran, 2013; Barr & Diamond, 2008; Rabalino, 2005; Holzman, 2005).

Most of these problems are caused by the manual approach used by the pension fund

administrator (PFA), although, some regions in Nigeria have adopted the computerized approach

(Casey, 2008).

However, in Rivers State, the manual has been in existence for over a period of time. In this

approach, this high probability for human error and encourage mismanagement of resources.

This study aims to introduce a system where workers can easily be contacted without the stress

of standing in a long queue to be screened. Evidence from empirical review has shown that

mismanagement of resources and lack of continuity in policies and reforms have had an adverse

3
effect on growth and development in Nigeria (Asaleye, Olurinola, Oloni & Ogunjobi, 2017;

Asaleye, Okodua, Oloni & Ogunjobi, 2017; Oloni, Asaleye, Abiodun & Adeyemi, 2017).

Theoretically, the principle of operational efficiency stressed the importance of pension fund

after retirement (Campbell & Fieldstein, 2001). In light of the importance of pension service to

improve welfare. This study uses the Waterfall model to investigate the collection of the pension

fund in Rivers State, Nigeria. This model allows reviewing and ascertaining if the project is in

the right direction and whether to carry on with the project or to abandon the project. The phases

are; the requirements; the design; the implementation and unit testing; integration and unit

testing; operation and maintenance. This project is important in Rivers State due to large

numbers of employers that have not received their pension after service compares to other States

in Nigeria.

1.2 Statement of the Problem

Teacher pension and gratuity has been facing setbacks as a result of late payments of teachers,

poor teachers’ information management system, and inaccurate payment. Many teachers has

given up hope on their gratuity due to the stress loss of data and inaccurate payment after waiting

a long while for their gratuity. This promted the review of the already existing teachers pension

and verification system. the study then intends to improve on the already existing model to

enable the pension committee carryout an effective payment of teachers’ pension we due.

1.3 Aim and Objectives of the Study

This aim of this study is to develop an enhanced teacher pension verification system using

distributed data processing; the objectives of the study are:-

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 i. analyze the regular mode of teachers’ pension verification system

ii. design an improved model of enhanced teachers’ pension verification system using

distributed data processing

iii. implement the using BigQuery and Databricks Lakehouse Platform.

iv. test the implemented model of an enhanced teachers’ pension verification system

1.4 Significance of the Study

The findings of the study will be significant to:

i. The Government: it will help the government in reducing the rising rate of fraud in terms

of teachers’ pension

ii. Society: it will help the retired teachers to get their pensions available to them without

stress rather than going to the pension office.

1.5 Limitation of the Study

Some limitations found during this research include:

Financial Limitation: - This is one of the major constraints, which has limited the extensiveness

of this work.

Time Constraints: - The time given for this research work was not enough to get

comprehensive information about the study.

1.6 Definition of Terms

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

schemes.

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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

regulates 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.

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 CHAPTER TWO

LITERATURE REVIEW

2.1 Theoretical Framework

The theoretical framework is the procedure that can hold or support a theory of a research study.

The theoretical framework introduces and describes the theory that explains why the research

problems under study exist.

2.1.1 Theories on Innovations in Pension Fund Design

In recent years, institutional investors, regulators, and academics have proposed changes to DC

plans that address the problems of suboptimal contribution and diversification choices of DC

plan participants. In essence, these proposals try to turn investors’ inertia into a “force for good”

by introducing default contribution and investment options that help participants overcome low

contribution rates, lack of rebalancing and investment diversification, and other investment

maladies. Two proposals have been particularly successful, particularly after the enactment in the

U.S. of the Pension Protection Act of 2006 (Viceira 2007a), which has provided a legal umbrella

for their adoption by DC plans. One of them is the adoption of automatic enrollment clauses in

DC pension plans along the lines proposed by Thaler and Benartzi (2004) in their “Save More

Tomorrow” program.

7
The second one is the adoption as a default investment options in DC pension plans of

investment funds that provide investors with automatic rebalancing and diversification across

asset classes (Viceira 2007b). These are two main types of funds: Life-Style or Balanced Funds,

and Life-Cycle Funds. Life-style funds, also known as balanced funds, are funds which

automatically rebalance their holdings towards a target asset mix that remains constant over time.

For example, a fund might target a 60%-40% mix of stocks and bonds; periodically, the fund

sells some of the holdings of the asset class that has outperformed over the period, and uses the

proceeds to invest in the asset class that has underperformed as to keep the mix of stocks and

bonds in the portfolio on target. Plan sponsors typically offer a collection of these funds, each

one with a different target asset mix. Investors are expected to choose the fund that best fits their

risk tolerance.

These funds have been widely adopted by sponsors and regulators of DC pension plans in

developing economies. Life-cycle funds also rebalance automatically towards a target asset mix.

However, this target asset mix does not stay constant over time; instead it becomes increasingly

conservative over time until it reaches a certain target date, at which point the target asset mix

remains constant. For example, a hypothetical life-cycle fund with a target date set in 2045 and a

five-year glide path might start with an initial target mix of 90% in stocks and 10% in bonds. The

fund will automatically rebalance its holdings towards that target during the first five years of

life of the fund, at which point the target mix becomes 85% in stocks and 15% in bonds; every

five years the stock allocation in the target mix decreases by five percentage points, and

correspondingly the allocation to bonds increases by five percentage points, until in year 2045

the target mix becomes 20% in stocks and 80% in bonds and stays there thereafter.

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Plan sponsors typically offer a collection of life-cycle funds which differ on their target date,

with funds with closer dates starting at more conservative allocations. Investors are expected to

choose the fund whose target date is closest to their expected retirement date. These funds are

becoming widely adopted by plan sponsors in DC pension plans in the U.S., particularly after the

U.S. Department of Labor has granted a “safe harbor” provision for the adoption of these plans

as prudent default investment options in DC plans.

2.1.2 Theories on Life-Cycle Investing

Life-style funds are based on the idea of “risk-based investing,” or the advice common among

professional investment advisors, that conservative investors target a lower stock-bond asset ratio

than aggressive investors. Life-cycle funds on the other hand are based on the idea of “age-based

investing,” or the idea also common among professional investment advisors that investors

should target a lower stock-bond asset ratio as they age. Of course, conventional wisdom is not

necessarily based on a solid scientific foundation. However, the modern theory of long-term

asset allocation (Campbell and Viceira 2002) does provide a rationale for the asset allocation

strategies pursued by both types of funds. This point is developed in Viceira (2009), which

argues that life-cycle investing is a more appropriate asset allocation strategy from the

perspective of working investors.

To understand why, it is useful to consider the balance sheet of a typical working investor.

Working investors have two main assets in their balance sheets. One is their financial wealth,

which they can easily trade and spend. The other asset is their human wealth, given by the

present discounted value of their expected future labor earnings. Unlike financial wealth, human

wealth is not tradable. Working investors can only monetize the dividends paid out by their

9
human wealth, which are their labor earnings. For a typical working investor, human wealth

represents that largest fraction of his total wealth at a young working age.

The reason is that the investor has an expected life-time of labor earnings ahead of him, while he

has not yet had an opportunity to accumulate substantial savings. But, as the investor ages,

financial wealth increases through savings and the returns on invested savings, while human

wealth shrinks as there are fewer years of expected labor earnings ahead of him. Thus financial

wealth represents the largest fraction of total wealth when the working investor approaches

retirement. These considerations raise the question of how working investors should take into

account their human wealth when deciding how to invest their financial wealth. For working

investors with safe jobs, human wealth represents a buffer against adverse outcomes in capital

markets: They can finance consumption out of their stable labor earnings, and they can even

replace lost financial wealth by increasing their labor supply. Therefore, from a financial

perspective, the human wealth of working investors with safe jobs is equivalent to holding an

implicit investment in bonds. These bond-equivalent holdings are large when the investor is

young, and decline as he ages.

2.1.3 The Deferred Wage Theory

The deferred wage theory views the pension plan as a means of deferring some compensation

until an employee retires. This implies that the employee defers gratification, such that some part

of the benefit he should have gotten at the moment of service is held back by the employer till

retirement when the employer provides a pension payment in exchange for the services rendered

during active period. According to this theory, the employers of labour most of the time does not

10
see the advantages of providing a pension plan; firms offer pension plans because of economies

scale in administrative, portfolio management and other costs.

This theory argues that the employer receives cash flow benefits to the extent that the present

value of deferred wages exceeds the required funding. This theory explains the reason why some

private establishments in the developing economies and Nigeria in particular have found it

difficult to engage in the pension scheme as provided for in the 2014 Pension Reform Act. These

firms see the money they contribute as a waste since the employer won't be under their employ at

the moment of pension payment. Yet this is where the Act has its strong point since it has

provided that the pension contribution is done at the moment of active service, such that the

employer can see it as part of the employee’s remuneration, only to be deferred by the employee

(Edogbanya, 2013).

2.1.4 The Burges’s Activity Theory

On the other hand, the Burgess’s Activity Theory is interested in the life after the work force

years. According to them roles and interpersonal activities are regarded as the key feature of

successful retirement. Therefore, the individuals with a large number of roles are believed to be

better equipped to cope with the loss of single role and interpersonal activity. Therefore, this

theory argues that for any retirement plan to be seen as effective, it should provide means of

engaging the individuals with activities that should replace the loss of roles. The theory proposes

that older adults are happiest when they stay active and maintain social interaction. According to

them, without activity, the human brain which they described as a machine remains unexploited,

unchallenged and deteriorates faster than it should. This implies that if the retirees are left

11
without any activity, it will not only affect their social life but their health and total wellbeing

(Amune, Aidenojie and Obinyan, 2015).

Therefore, viewing this discourse from the lens of these two theories, it is in place to argue that

the welfare of the employee should not only concentrate on paying pensions and gratuity. Having

taken them off the work which has engaged them in decades, some of them have devoted much

time to their work that they know nothing else outside their work and areas of specialization.

Therefore, there is the need to introduce them to new forms of activity that should engage not

only their mind, but their social life.

2.2 Conceptual Framework

Each section presents the history to the sciences that support the current work. This also

describes the method, the current problems as well as scholarly opinions on solving the problem

mentioned.

2.2.1 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 dependents 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

12
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.

2.2.1.1 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

13
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.

2.2.1.2 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 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.

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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

organizations 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.

15
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.

2.2.1.3 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

16
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.

2.2.1.4 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.

2.2.2 Challenges of the Old Pension Schemes

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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

18
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.

19
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 retirement’s 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.

2.2.3 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

20
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 decentralized and privatized pension

administration in the country. The Act also constituted the National Pension Commission

21
(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.

2.2.3.1 Features of the 2004 Pension Reform

i. 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:

ii. Coverage and Exemption: The scheme accommodates workers in both public and private

sector organizations 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

22
 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.

iii. 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.

iv. 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 unfavorable to employees and discriminatory

against poorer paid employees.

v. Contributory: This privatized and decentralized 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

23
 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.

vi. 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.

vii. Voluntary Contributions: Section 9 (4) of the Pension Reform Act 2004 allows for

voluntary contributions which gives opportunity for the self-employed 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.

24
viii. 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.

ix. 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

25
 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.

2.2.4 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 skepticism 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 characterized 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.

26
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 =N=3.1billion 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

27
Police Pensions Office also allegedly collected =N=5 billion monthly as pensioners’ claims

instead of the actual requirement of =N=500 million.

Millions of pensioners who have served the country have their later 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

28
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

29
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.

2.2.4.1 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.

2.2.5 Pension fund management

30
Pension fund management requires the investment of assets to achieve the long-term provision of

funding for retirement (Klumpes, and Tippet 2004). Institutional social security, in some

measures or other, exists in almost all countries today. However, there is much variation between

countries with regard to the levels of protection, scope, coverage and effectiveness of the system

in place. As a group, the developed countries have the most advanced social security and pension

fund management systems. With very few exceptions, institutionalized social security and

pension fund management in the developing world is of relatively recent origin having appeared

only after the Second World War, following the emergence of several independent states at the

end of the colonial era (Alemu 2015).

2.2.5.1 Practice of pension fund in developing countries

Pension fund has been a struggling structure in most developing economies of the world.

According to (Catala 2004) in the last two decades, many developing countries implemented

pension reforms from publicly managed pay as-you-go defined benefit systems to privately

managed fully funded defined contribution schemes. One of the potential macroeconomic

benefits typically associated with such pension reforms is the development of domestic financial

markets. In fully funded pension systems, the argument goes that the rapid accumulation of

domestic financial assets by pension funds bolsters the domestic bond and stock markets.

Developed domestic financial markets, in turn, lead to more efficient allocations of both

domestic and foreign savings to productive investments in the domestic economy, which spurs

productivity and growth. Pension funds could trade frequently, increasing the liquidity of the

domestic stock markets, and thus crowding in savings and new investors. Similarly, the intense

trading of stock by pension funds and their large size may induce them to seek the introduction

31
of innovations and new financial instruments to lower transaction costs, again attracting

additional savings and new market participants (Ventura, 2001; Phillip, 2002; Catala 2004).

2.2.5.1 Pension fund management in advanced economies

According to Preqin (2011) Special Report, Public pension funds are important and experienced

investors in alternatives and on average allocate 5.5% of their capital to private equity, with

significant commitments also existing to hedge funds, private real estate and infrastructure. He

examined the financial statements of over 150 public pension funds from North America, Europe

and the UK to ascertain how well their investments across various asset classes were performing.

His data shows that the 20 largest public pension funds have a total of $224 billion allocated to

private equity, and their high levels of assets under management make fund managers keen to

attract this type of investor. The long term, high risk nature of alternatives are well matched to

long term liabilities of pension plans, providing diversity to investment portfolios, and giving

potential to yield high returns (Exley, Mehka and Smith 2003).

2.2.5.3 Practice of pension fund management in emerging economies

According to Ventura (2001), Brazilian pension funds are minority shareholders with no direct

involvement in the operations of their investee companies. Thus, they must invest in transparent

companies, ones that treat their shareholders fairly and whose management is responsible and

renders full account of its administration. This shows that a good quality Corporate Governance

contributes to improved company management. China has National social security fund (NSSF).

According to (Impavido, Hu & Li 2009), Fund management has also been centralized (―pooled‖

in Chinese terminology) as a way to improve standards. The central government‘s fiscal transfers

to nine of these thirteen provinces are managed by the national social security on behalf of the

32
provinces for a period of at least five years and for a guaranteed rate of return. The provinces do

not need to pay NSSF the management fee, which is covered by Ministry of Finance (MOF)

budget. When we come to India, Government employees are covered under provident fund and

pension fund with a pay as you go system. Pension Funds are managed by Pension Fund

Administrators and they are responsible for taking investment decisions but in some

jurisdictions, pension fund management can be by asset management and insurance companies

and some management decisions may be the responsibility of Boards of Trustees in some

corporate organizations. Pension Fund Custodians are those who keep custody of pension funds

(Iman 2011).

2.2.5.4 Contributions of Pensions to the Economy

The pension arrangement permits pension fund administration with increasing fund leverage of

employers and employees for long-term. Thus, pension funds are sources of long-term finance

for capital investment, as they have access to longer term funds through contributions by

employers and employees towards retirement. The Pension Reform Act 2014, in Sections 86 and

87 permit Pension Fund Administrators (PFA) to invest or engage in various types of investment

with the objective of safety and fair return on their investments. Section 90 provides that every

PFA shall conduct extensive research and due diligence prior to investment as well as utilize the

risk report to the risk rating of the instruments that has been undertaken by any risk rating

company registered under the Investment and Securities Act.

What infrastructure do we need for sustainable development? They include electricity, roads &

rails, airports, power and communication, functional educational institutions and health facilities.

The pension funds as at December 2017 have already accumulated an investment fund

33
equivalent to 55% of GNP (PenCom 2018), and some experts forecast that that percentage will

rise to 100% of GNP when the system reaches full maturity. This long-term investment capital

not only has helped fund economic growth but has spurred the development of efficient financial

markets and institutions (Barr 2001).

The PFA‘s are very active participates in the Nigerian Capital Market. See Table 2 for their

Pension Assets Investments. Another way of encouraging funding is the provision that

contributions made by employees to the scheme under this Act shall form part of tax-deductible

expenses under the relevant Nigerian tax law (section 10). Section 11 (1) of the act makes it

mandatory for every employee to maintain an account retirement savings account‖ in his name

with any pension fund administrator of his choice. Looking at the pension arrangement in the

developing economies of the world, the eligibility of pensioners varies and the population

covered is encouraging in Nigeria, Argentina and Kenya. The table 1 reveal a summarized view

of the pension arrangement and the ratio of population covered.

2.2.6 Concept of Retirement Benefit

Retirement, though a recent development is becoming a very popular terminology. Its popularity

is associated with the fact that people have different deductions and connotations. Hanson (1977)

gave two distinctive meanings of retirement, thus:

i. Retirement is an American term for repayment of public debt.

ii. One of the benefit due men over 65 and women over 60 after faithful services.

The second meaning harmonizes with the literal expression by Hornby (2015) which says that

retirement is that retirement is:

34
 i. Stopping work because you have reached a particular age.

ii. The period of life after you have stopped work at a particular age. The Wikipedia version is

more elaborate as it reveals the suggestion contained in Human

Resources Dictionary which posit that: Retirement is when a person stops working after the

service of a certain period of time. The reason of retirement could vary. It could be the age of

retirement as set by government or the organization, the voluntary retirement due to some health

issues, working conditions or other issues. Retirement could be complete retirement, when a

person stops working completely or semiretirement when a person reduces his working hours in

consent with the organization. In case of semi-retirement the compensation is different from full

employment as well as full retirement.

Hornby (2015) says that benefit, among other things, is an advantage you get from an

organization (company) in addition to the money that you earn. Succinctly put, retirement benefit

is any benefit received upon retiring from employment, under a formal or informal benefit plan.

Wikipedia version has it that retirement benefits are benefits payable to a beneficiary or members

of a pension scheme on retirement or earlier withdrawal from service. The components of a

retirement benefit may vary according to the content of the retirement plan. The most common

benefits could be pension gratuity, medical aid, disability support, life insurance, paid time off,

and or other fringe benefits. Ward (2001) opined that the concept of benefits under a pension

plan has changed and that to make the best out of a retirement, one will need a reasonable

income or has other sources of income other than pension.

35
2.2.6.1 Benefit Provisions to Retirees

Simple logic reveals that retirement must be preceded by work and retirees welfare preceded by

workers welfare. And it could be said that the capitalist economy and the tenets of capitalism

have made it that the workers welfare seem to be limited to the moment the worker is still

serving the organization. This could be why the benefit of the retirees has not been well

protected especially in the developing countries like Nigeria. The workers are essential to the

means of production (Drucker, 2010) and therefore deserve to be respected and accorded proper

benefit which is believed to improve their sense of worth, boost their self-esteem and financial

status in order to motivate them in their job and consequently increase productivity (Thorsen,

2006).

Therefore, Deeprose (2006) argued that employers who look beyond instant profit making

should seek the benefit of the workers in order to ensure enduring sustainable business earning of

profits in perpetuity. This is because; lack or inadequate retirement packages and other incentives

ultimately lead to poor worker’s motivation which will hamper their productivity (Okereke and

Daniel 2010). Therefore, enriched retirement package is not good only for the workers, but for

the organization and all stakeholders. These workers are the ones that will ultimately resign, and

be called retirees. Therefore, in extension of this logic, if the worker is motivated because their

welfare at the period of service is taken care of, what of when in addition to their present welfare,

their future is insured through retirees' benefit? Rationality tells they will be more motivated and

relaxed to give their best to the organization, being aware that they won't lack at the expiration of

their service years.

36
2.2.6.2 Types of Retirement Benefit Scheme

It is quite unfortunate that the welfare of the retirees in Nigeria have not been well handled over

the years. A search of literatures shows that little or nothing has been done for the total package

of the retirees outside the pension and gratuity which is monetized. Yet the pension and gratuity

system have been found wanting in many areas which have led to many pension regimes and

finally the 2004 Pension Reform Act. According to Kareem and Kareem (2010), the pension

programme was designed to improve the living standards of the elderly and the group that is out

of the labour force. They further highlighted that there are two types of pension scheme are the

public and the private pension schemes.

The main different of interest here between the public and private scheme is the savings aspect of

the schemes, whereas the public scheme does not involve saving and mostly funded by the

employer, the private involves the employee saving towards the retirement period to withdraw

from both the principle and the returns (Bertrand, Miller and Mullainathan, 2013). Over the

years, through levels of reformation, the pension systems have been severally classified; but in

all, they still fall between defined benefit and defined contribution. For the mid-90s, Kotlikoff

(1996) asserts that the pension systems are between the Pay-As-You-Go (PAYG) and Defined

Contribution Fully Funded (FF) programmes.

Apart from the distinction also given by Macgreenvey (1990), Linbeck and Persson (2003) gave

a broader view of this classification as they saw pension systems as being between defined

contribution and defined benefit, funded and unfunded and actuarial and non-actuarial pension

systems. Therefore, from this classification, it is understood how countries move from one

37
classification to another in search of a more effective scheme for their retirees. Nigeria like other

countries has struggled to device a scheme suitable for their system and the benefit of the

retirees. The schemes in Nigeria have been classified as the old pension scheme and the new

pension scheme; the new being the result of the 2004 Pension Reform Act Amended as Pension

Reform Act 2014 (Akhiojemi, Ifeanacho and Abu, 2018).

2.2.7 Challenges of Present Retirement Benefit Package

Some inherent challenges bedeviled the old pension scheme that informed the need for a new

one (Ngozi, Tennyson and Aronu, 2013; Ettah and Michael, 2014). And that confirms what

Lindsay (2009) and Okpugie (2011) said concerning systems providing pension for the public

sector workers both in developed and developing countries, that it has been a problem for the

government as well as for the tax payers. The previous schemes identified to have been practiced

in Nigeria include the occupational scheme, mixture of funds by the private sector as well as the

pay as you go (PAYG) scheme. And these schemes have been identified with various challenges

which include: poor staffing and equipping that led to poor record keeping (Akhiojemi,

Ifeanacho and Abu, 2018); the clumsy and untidy arrangement of splitting the disbursement

process between the federal and state service and other agencies was another challenge to

overcome (Ogbuchi, Chukwuemeka and Uche, 2011); bribery and corruption (Ngozi, Tennyson

and Aronu, 2013). If these reasons are what failed the old system, which now ushered in the new

system, one would believe that the new system would be all for the benefit of the retirees and

therefore appreciated by both the retirees and employers

Therefore, other scholars have argued that apart from the above challenges, there are other

reasons why previous pension schemes failed in Nigeria. According to Casey (2011), the

rationale behind the copying of foreign pension policy into Nigeria is questionable. He further

38
argued that the pension policy of Chile which was copied wholly, cannot work in Nigeria

without a consideration of the Nigeria environment and economic situation. Similarly, Kpesse

(2011) argued that corporate fraud, lack of competence and technical knowhow in the principles

of prudent management of the pension funds as well as political manipulations in the investment

practices by the people involved in the administration of the funds is the cause of pension system

failures in Nigeria. Odia and Okoye (2012) on their concluded that the “wrong investment

decision, wrong assessment of pension liabilities, arbitrary increase in pension without

corresponding funding arrangements, non-preservation of benefits and serious structural

problems” are responsible for the failure of pension schemes in Nigeria.

The argument as far as supported by studies (Kpesse, 2011; Robolino, 2011; Klumpes and

Mason, 2012; Morrison and Fiiwe, 2017), is that if these challenges are not tackled in any

scheme introduced into the Nigerian system, no matter how enticing and promising it may sound,

will not be effective. Nevertheless, this study finds in literatures that researchers have been able

to analyses the past pension scheme in Nigeria, highlighting the reasons for their failure; they

have also exposed the weaknesses in the new system. They as well have enumerated the impacts

of both the old and the new pension schemes on the retirees. Nevertheless, this study has

established that literature is lacking on the areas of the general welfare of the retirees. This is

based on the definition of welfare given above, which puts this study on the position that welfare

of the retirees does not just entail pension and gratuity. This is so because, with the situation of

the Nigerian economy, the present provisions of the 2014 Pension Reform Act may not be able

to cater for the welfare of the retiree in general.

39
2.2.8.1 Evolution of the Nigeria Pension System

In consideration of the rationality of the Nigeria pension scheme, the concept of pension could be

said to be as old as man and his working environment. As suggested by scholars, and as noted in

historical notes, even in primitive time, man was inclined to put aside something, in cash or kind,

but mostly in kind to take care of the rainy day

The rainy day according to Okpaise (2005) also included the old age. Also, in modern times, it is

generally conceived as the sum of money paid regularly by employers to former employees who

retired from their service usually as a result of attaining a fixed age limit in service or due to

other reasons like sickness, widowhood or disable people, or by former employers or financial

institutions to retired people (Assein, 1998). According to Mohammed (2013), to account for the

Nigerian pension system, it is essentially a legacy of the British colonization which was first

applied to the few white colonial lords and workers in the colony of Lagos in 1861. The pension

then was designed to guarantee a fairly normal retirement age with generous provisions for

voluntary early retirement of its target beneficiaries (Assein, 1998).

The system operated until 1960 when Nigeria gained independence and the pension law began to

witness changes. In like manner, the first major legislation in Nigerian was the pension ordinance

of 1951, with retroactive effect from January, 1946 (Oloniniyi and Olofunfunlola, 2004). The

law allowed the Governor- General to grant pensions and gratuities in accordance with the

approval of the secretary of state colonial affairs in the British government. Vesting period was

fixed at 10years of service. 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

40
satisfaction of the Governor General that, the officer was found guilty of negligence, irregularity,

misconduct (Demakin, 2006). As earlier mentioned, the pension scheme in the public sector has

undergone various developmental stages after the first pension ordinance. For example, the civil

service pension scheme was established by the basic pension decree 102 of 1979, the local

government pension scheme was established by the military fiat in 1977 and the armed forces

pension scheme created through decree 103 of 1979 with retroactive effect from April 1974.

There were also the pension‟s rights of judges Decree No5 of 1958 as amended by amendment

Decree No5 of 1988. The police and other agencies pension scheme Decree No75 of 1993 which

took retroactive effect from 1990 represented another landmark development in the history of the

Nigerian pension system (Mohammed, 2013).

As regard the private sector, the first pension scheme in Nigeria was set up for the employees of

the Nigerian breweries in 1954, which was followed by United African Company (UAC) in 1957

(Okpaise, 2005). In like manner, national provident fund (NPF) was the first formal pension

scheme in Nigeria established in 1961 for the non-pensionable private sector employees. It was

largely a saving scheme, where both employees and employer would contribute a sum of four

naira (#4) each on monthly basis (Onuoha, 2006). The scheme provided for only one-off lump

sum benefits. The Nigeria social insurance trust fund (NSITF) was established by Decree No73

of 1993 to take over the NPF scheme and provide enhanced pension scheme to private sector

employees.

2.2.8.2 The Challenges of the Old Pension Scheme

According to Iwunze (2006), the need for pension reform was necessitated by the myriad of

problems that plagued both the Define Benefit (DB) arrangement-pay as you go (PAYG) in the

41
public sector and other forms of pension systems like occupational scheme that operated in the

private sector. One of the challenges of the public sector DB scheme as viewed by Orok (2005)

lied in its dependence on budgetary provisions from various tires of government for funding. The

scheme became largely unsustainable due to lack of adequate and timely budgetary provisions.

This was the reason for the soaring gap between pension fund obligations and revenues, which

threaten not only economic stability but also crowed out necessary investments in education,

health and infrastructure. This was exacerbated by various increases in salaries, which ultimately

led to increase pension and hence undue pressure on government fiscal responsibilities. Another

challenges encountered by the old pension was the weak, inefficient and cumbersome

administration due to poor staffing and equipping (Duze, 2005).

This had often been caused by poor record keeping at all pension offices throughout the country

as a result of which many pensioners had to spend years before their retirement benefits were

paid. The exit phase was quite challenging where payment procedure was often very tedious,

sometimes the pensioners had to wait for days and years, to collect their entitlements. Similarly,

the reimbursement process for the split of pension and gratuity payment between federal and

state services and other agencies was very clumsy, untidy and sometimes fraught with bribery

and corruption. There were undocumented cases where the reimbursing agency holds the

recipient to ransom. The private sector schemes on the other hand were characterized by very

low compliance ratio due to lack of effective regulation and supervision of the system. Most of

these schemes were subjected to provident fund schemes which did not provide for periodic

benefit (Ghilarducci, 1992).

2.2.8.3 The New Pension Scheme

42
The Pension Reform Act 2004 (PRA) 2004, is the most recent legislation of the federal

government aimed at addressing the problems associated with the old pension system. It

established the contributory pension scheme (CPS), which is a uniform pension system for both

the private and public sector. Similarly, for the first time in the history of Nigeria as a country, a

single authority, the National Pension Commission was established to regulate and supervise all

pension matters in the country. The scheme is being managed by authorized pension

administrators (PFAs) while the custody of the pension fund assets are provided by licensed

pension fund custodians (PFCs) (Adeleke, 2005). The move from Direct Benefit scheme to

define contributory scheme is now a global phenomenon following the success stories of the

Chilean pension reform of 1981. The paradigm shift from the Direct benefit scheme to funded

schemes in developed and developing countries was ascribed to such factors as increasing

pressure on the central budget to cover deficits, lack of long term sustainability due to internal

demographic shifts, failure to provide premised benefits etc (Onuoha, 2006). Thus, developed

countries like USA, UK and emerging market economics of Chile, Mexico, Nigeria etc. adopted

the founded pension scheme because it enhances long term national saving and capital

accentuation, which if well invested can provide resources for both domestic and foreign

investment (Mohammed, 2013).

2.2.8.4 Contributory Pension Scheme of 2004

The 2004 Pension Reform Act is a paradigm shift from the 1979 Pension Act. Under the new

scheme, employers and employees alike are to contribute 7.5 percent of employees‟ monthly

emolument which include basic salary, housing and transport allowance. However, military

personnel are to contribute 2.5 percent while the Federal Government contributes 12.5 percent of

the employees‟ monthly emolument (Pension Reform Act, 2004). The scheme covers the private

43
sector with five or more employees. The only exceptions are public employees who have three

years or less to retire with effect from the date of enactment of the Pension Act being 30th June

2004 (National Pension Commission, 2004). The employer may elect under the 2004 Pension

Act to bear the full burden of the pension by contributing not less than 15 percent of the

employees‟ monthly emolument.

2.3 Empirical Studies

This section focuses on the research works of scholars that related to the current study.

Different empirical researches have been carried out to find the link between pension fund

management and economic performance.

Studies like Odia and Okoye (2012) compared the old pension scheme with the Pension Reform

Act 2004 using a comparative analysis method to compare and contrast the pre-2004 pension

scheme with Pension Reform Act 2004. Their study finds that the PRA 2004 is better than the

pre-2004 pension scheme, and that the PRA 2004 is expected to help remedy the deficiencies and

inadequacies prevalent in the old pension scheme. Contradicting this finding is the study of

Olanrewaju (2011) who also examined the Pension Reform Act 2004 and well-being of Nigerian

retirees based on the Marxist theory. The study critically analyzes the 2004 pension policy of the

government on the wellbeing of Nigerian retirees and discovered that the PRA 2004 failed to

contribute to basic social security in old age for the majority of Nigerians employed in the

informal sector while the minority of covered workers experience problems.

Micah and Obah (2016) investigated the relationship between pension fund administration and

infrastructure financing in Nigeria. The study used a simple random sampling to select 108

respondents for the study and subjecting to Pearson Products moment correlation. The result

44
show that there is relationship between retirement pension account and return on economic and

social infrastructural financing; and there is also a significant relationship between

superannuation pension account and economic and social infrastructural financing in Nigeria.

Essien and Akuma (2014) compare the new pension scheme with the old pension scheme with a

view to highlighting some areas of departure in the new pension scheme from the past ones.

Their study revealed that the past pension schemes were plagued with financial misappropriation

(corruption), which gave vent to their ineffectiveness and subsequent abrogation. Edogbanya

(2013) assessed the impact of contributory pension scheme on Nigerian economic development

for the period (2007-2010). Using correlation analysis for testing secondary data and ANOVA

for the primary data. The study revealed that risk prevalent has positive effect on pension fund

management and that the contributory pension scheme has significant positive impact on the

GDP.

Kotun, Adeoye and Alaka (2016) examined the justification for the contributory pension scheme

as part of its values and determined their implications for public servant productivity and

pensioners welfare in Lagos State. Their study using a field survey collected primary data via

simple random sampling method and the result of the analysis discovered that there is significant

relationship between adequate retirement package and employees ‘productivity and that it has a

positive impact on the organization efficiency. The oral interview conducted however, found that

the contributory pension scheme (CPS) has positive potentials over the defined benefits pension

scheme (DBPS).

Jeff-Anyene, Ezu and Ananwude (2017) examine the effect of pension scheme contributions into

the retirement saving accounts of employees on national, urban and rural poverty levels. The

45
study using ordinary least square regression analysis for data for the period of 2004 to 2015

revealed that pension contributions have no significant effect on national, urban and rural

poverty levels. However, Farayibi (2016) also examine the effect of the operation of the funded

pension scheme since its inception in 2004 on economic growth in Nigeria using error correction

mechanism (ECM) and Ordinary Least Square (OLS) methodologies. Findings revealed that the

pension fund contributions from both private and public sectors in Nigeria increased greatly and

constituted a huge investment fund in the capital and money markets.

However, the study of Nwanne (2015) examined the impact of contributory pension scheme on

economic growth in Nigeria for the period 2004-2012. The study using Ordinary Least Square

Regression method also discovered that that pension funds have negative and significant impact

on economic growth while pension savings had positive and significant impact on economic

growth.

Zubair (2016) examined the impact of pension fund investments on the performance of capital

market in Nigeria. The study looked at a time series analysis covering a period from 2009Q3 to

2016Q1 using the Autoregressive Integrated Moving Average (ARIMA) regression technique.

The study concludes that there is a significant positive relationship between pension funds

‘investments and the performance of capital market (in terms of debt and Liquidity) in Nigeria

after the 2004 major industry reform.

Ameh, Ajie and Duhu (2017) evaluate the impact of contributory pension scheme on economic

growth in Nigeria. Using data from various issues of PenCom Annual Reports and World Bank

Development Indicators (database); the findings revealed that pension fund assets and pension

contribution /savings mobilized over the years have positive but insignificant impact on

46
economic growth. Another look at the pension assets is the study of Eke and Onafalujo (2015) on

the causal relationship between interest rate, capital market, and pension assets in Nigeria from

1981-2013. Their study using ordinary least square (OLS) regression technique in a recursive

system reveals that pension asset is directly sensitive to stock market Index, while the index is

inversely sensitive to short term interest rate, implying that the high short-term interest rate

regime might be inimical to building wholesome‘ pension assets of the capital market.

The pre-2004 pension reforms had a number of problems and were replaced by the Pension

Reform Act 2004. Olanrewaju (2011) and Dostal (2010) pointed out the major weaknesses of the

pre 2004 pension reforms to include: Massive accumulation of debt estimated at over two trillion

naira; large-scale arrears of unfunded entitlement of retirees; inadequate budgetary provisions

coupled with rising life expectancy; increasing number of employers, wages and pensions; and

inadequate supervision and regulation of pension system. These shortcomings adversely affected

payments of retirement benefits to retirees in Nigeria. Consequently, the pension system prior to

2004 was characterized by many problems which made the payment of the retirement benefit a

failure in Nigeria. The old pension scheme lacked adequate and timely budgetary provision

coupled with rising life expectancy, increasing number of employers, poor implementation of

pension scheme in the private sector due to inadequate supervision and regulation of the system

and the fact that too many private sector employees were not even covered by the pension

scheme. The problems associated with the old pension system in Nigeria necessitated the

systematic pension reform which changed the defined benefit scheme to the defined contributory

scheme (Koripamo-Agari, 2009 and Yunusa, 2009). The new Pension Reform Act, predicated

upon a defined contributory scheme, was established in 2004 to ameliorate the inadequacies of

the old scheme. Ten years after the establishment, several amendments have been made to the

47
2004 Act. These include; the Pension Reform Amendment Act 2011which exempts the

personnel of the Military and the Security Agencies from the contributory pension scheme as

well as the Universities (Miscellaneous); Provisions Act 2012, which reviewed the retirement

age and benefits of University Professors and the Pension Reform Act 2014. This incorporated

the Third Alteration Act, which amended the 1999 Constitution by vesting jurisdiction on

pension matters in the National Industrial Court (FGN, 2014). However, whether the new

pension act has been able to address the problems associated with retirement schemes in the past

is a major concern. Specifically, some have asked whether the Contributory Pension Act of 2004

has been able to address the problems of corruption, poor administration of pension fund,

embezzlement, inadequate build-up of pension fund, poor monitoring and evaluation, and the

general institutional failure which characterized pension schemes in Nigeria. This situation poses

great challenge to the financial security of workers after retirement.

Poterba, Venti and Wise (1996, 1998) examined the effect of tax deferred savings accounts on

overall savings rate. They opined that tax deferred savings mechanism like Individual Retirement

Accounts lead to a net increase in savings, while others (Gale and Scholz 1994, Engen et al,

1996; and Gale, 1998) argues that the balances in these savings vehicles are offset by reductions

in other forms of household wealth (Card and Ransom, 2007).

Thaler and Benartzi (2004) assessed the effectiveness of contributory pension scheme at

increasing employee savings rate. From the study, employee who opted into an automatic annual

3% increase in their contribution rate saw their average contribution rate increase almost 4-folds

from 3.5% of pay to 13.5% of pay, over the course of 4 years. In the opposite direction,

employees who did not elect contribution pension scheme saw their average contribution rate

increase by much less over the same time period, from 5.3% - 7.5%. Interestingly, this latter

48
group started out saving much more than those who opted into contributory pension scheme but

the relative positions were reversed 4 years later. The literature is also of the opinion that people

with a future orientation save more than people who live for the here and now (Munnell et al,

2000). Further in the literature, Komolafe (2004) submitted that the Nigerian Pension System in

general is fragmented, lack an adequate overall policy, a legal and regulatory framework and an

empowered coordinating body to supervise it.

Babatunde (2012) on the Nigerian scenario summarized that there is significant relationship

existing between contributory pension scheme and savings. He therefore reiterated on the advice

of Adegbayi, that Nigeria must avoid minor pension reforms that are repeated periodically

because of political problem associated with such adjustment. However, Eme and Uche (2014)

has added to the fact that in the 10 year period, the pension industry in Nigeria has experienced

phenomenal growth from a deficit of N2trn in the form of pension liabilities in 2004 to an

accumulation of pension fund assets of up to N4.1trn by the end of 2013, a firm backing to the

economy by the huge pool of funds.

The findings of Chizueke et al, (2011) revealed that contributory pension scheme significantly

affects workers commitment to work, retention and attitude towards retirement. The study

recommended among others that strict measures be put in place by government to ensure the

effective monitoring and implementation of the provisions of the 2004 Pension Reform Act.

Ikeanyibe and Osadebe (2014) noted that a mandatory contributory pension scheme should be

distinguished from poverty relief programme and universal social security benefits to avoid

scheme overloading. Above all, the study opined that there is need for enlightenment directed

towards the employees understanding their rights and demanding it from the employers as

concerning private sector coverage. However, the study of Egbe, Awogbemi, and Osu (2013)

49
about Portfolio Optimization of Pension Fund Contribution in Nigeria found that the PenCom

guided portfolio is not optimum.

The findings of Ozokwere (2008) showed that the Pension Fund Administrators play their roles

according to the dictates of 2004 Pension Reform Act. Such factors as finance, too many

regulations and overlapping functions amongst others, affect them in playing their roles

effectively and more so, those problems affecting the Pension Fund Administrators are rated as

significantly high. In the light of this discovery, the study recommended the formulation of a

robust policy that would enhance the capacities of the Pension Fund Administrators and boost

economic growth and development. Dagauda and Oyadiran, 2013 did an analysis of the impact

of the 2004 pension policy on the welfare of the Nigerian civil servants, with emphasis on

selected Federal ministries. From the analysis, findings that emerged clearly indicated that the

implementation of the funded pension significantly improved the welfare of the civil servants but

does not address the problem of corruption and inadequate budgetary allocation and therefore not

effective in overcoming the problems of retirees in Nigeria. In view of the above findings, the

study recommended among others that government and Pension Commission must strengthen

monitoring and supervision unit of the commission to ensure effective monitoring, supervision,

and enforcement; and effective implementation of penalties as provided by the Act on non-

compliers regardless of their status in the society.

Ayegba (2013) did an evaluation of Pension Administration in Nigeria. The study advocated the

need for public enlightenment on the merit of the new contributory pension scheme, the 2004

Pension Reform Act is key to enable Nigerians in Diaspora who may want to contribute to the

retirement saving scheme to do so and the government should punish those who steal

pensioners‟ funds to serve as deterrent to others. The study concluded that a well-organized

50
structure that will ensure prompt payment of retirees and pensioners is highly desirable and this

must be vigorously pursued by the government to facilitate economic development. The study

recommended that the Nigerian government should encourage the option of having the banks

where the salary accounts of employees are domiciled to make pension deductions on monthly

basis possible and have it remitted to the Pension Fund Administrators.

Olarenwaju (2011) examined the pension act of 2004 and the well–being of retirees in Nigeria

using descriptive statistics. The study relied on the Marxian theory to analyse the descriptive data

that was collected through structured questionnaires administered to retirees in Nigeria. It was

gathered that while operators in the private sectors have started benefitting from the scheme, the

public operators are yet to benefit as bureaucracy in government especially the delay in releasing

counterpart funding from government has deprived many retirees from assessing their benefit

after retirement. Gunu and Tsado (2012) studied contributory pension scheme as a tool for

economic growth in Nigeria. They used descriptive statistics to analyse the primary data which

was collected through structured questionnaire administered to pensioners, managers and

contributors. Their findings revealed that contributory pension scheme has begun to impact

positively on the lives of operators and Nigerian capital market. The authors therefore,

recommended for an increased awareness and strict monitoring of managers of the pension funds

to ensure the huge success of the programme in Nigeria.

Odia and Okoye (2012) compared the old pension act and the new pension act in a comparative

analysis using descriptive statistics. The study finds that the new pension act started on a better

note compared to the old pension act in terms of mobilization, participation and funds

accumulation. The study simply recommended for continued awareness and mobilization for a

successful pension scheme. Nwanne (2015) carried out a research on the impact of contributory

51
pension on economic growth in Nigeria between 2004 and 2012 in an ex post facto research

design using a multiple regression model. The study find out that pension funds have negative

significant relationship with economic growth in Nigeria. The author recommended for the

expansion of investment outlets from the pension fund and general expansion in pension

administration in Nigeria for a positive to be achieved. However, despite these studies, there is

still a gap in the empirical literature as regards studies that assess the overall effect of the

operation of the Contributory Pension Scheme on economic growth in Nigeria since its inception

in 2004. This is the focus of this study.

52
 CHAPTER THREE

System Analysis and Design

3.1 Methodology

The system design methodology employed for this study is the Object oriented Design

Methodology (OODM).In the object-oriented approach, the focus is on capturing the structure

and behavior of information systems into small modules that combines both data and process.

The main aim of Object Oriented Design (OOD) is to improve the quality and productivity of

system analysis and design by making it more usable.

In analysis phase, OO models are used to fill the gap between problem and solution. It performs

well in situation where systems are undergoing continuous design, adaption, and maintenance.

It identifies the objects in problem domain, classifying them in terms of data and behavior.

The OO model is beneficial in the following ways:

i. It facilitates changes in the system at low cost.

ii. It promotes the reuse of components.

iii. It simplifies the problem of integrating components to configure large system.

iv. It simplifies the design of distributed systems.

3.2 Analysis of the Existing System

The existing teacher’s pension verification process is done manually. Teachers’ records are kept

in a file 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

53
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.

3.1.1 Architectural of the Existing System

Figure 3.1.show the Manuel process of verifying employer during pension using face to face

system. The process can be manipulated human.

54
Admin

Employer

Supervisors
Retirement date and
years Check documents
File
carbeget
Department
Verification
Approval

Local government
Make report

Rank (level)

Pensioner

Figure 3.1 Architecture of the Existing System (Sources: James, I.A, 2012)

The architecture of the existing system is made up of eleven (11) boxes, the employers is also

like an admin the employer enters the details of the employee, the retirement date is the date and

year that the employee retires from office, the department is where the employee served, the

local government is where the retired employee as served, the rank (level) shows where the

55
employee level ended before retirement (e.g. Level 3, 4, 5, 6, 7, 8 etc.). Supervisors then checks

the documents to verify against fraudulent activities.

3.1.2 Constraints of the Existing System

Considering the use of the various existing teacher pension verification system are:

i. It can be influence by people.

ii. It is restricted to some group of people.

iii. Cannot be used in a restricted area or geographical region.

iv. Mostly difficult to access reliable information.

3.2 Analysis of the Proposal System

A web-based teachers’ pension verification is a system designed to manage pension activities

and verification of Pension that quantify for payment and so that payment end. The pension

management activities on the part of admin include regular update of teachers‟ information,

crediting of teacher ‟ account if the teacher is retired etc while teacher ‟ activities include

checking their balance online, making enquiries by sending mails, etc

Verification Subsequent to the initial verification of pensioners, the admin shall conduct, on a

periodic basis, continuous verifications for already verified pensioners whose records and

biometrics have been inputted into the database with a view to determining their alive status.

Such verification should be conducted annually, in the minimum. To this end the admin shall put

in place a system for continually verifying already enrolled pensioners. Such a system should

allow for the verification of pensioners at their own convenience and should be based on their

56
presentation of an approved mode of identification at their various pay points i.e. banks. The

Pensioners Payroll must be updated to reflect the outcomes of such continuous verifications.

Accordingly, the admin shall ensure that all pensioners who are not so verified are suspended

from the payroll pending the confirmation of their aliveness or otherwise.

3.2.1 Justification of the Proposed System

i. It can be access anywhere and anytime in the world

ii. It create a paper free office/home since all the application is submitted on line

iii. Application form is unlimited

iv. Transparency

3.4 System Model

Our actual software development methodology uses a recursive and object oriented development

method for which the entire system is broken down into subsystems and modules. In the

OOM/RD model software processes are basically the same, with early parts of the process

defining a topmost level structure, and these processes reapplied to parts of the main structure in

turn to define much greater details.

The steps in a typical OOM/RD model will generally include the following details:

• Identification of critical objects of the main systems design by breaking them down into

modules (smaller blocks) or subsystems

• Performing software processing on identified objects

• Re-applying software processing on the identified objects

The steps are crucial to almost any object oriented engineering design and must performed in a

recursive manner to arrive at reasonable performance estimates. Bottom-up design is the type of

57
object oriented technique used in the systems design, because it is best for systems which are

created from existing system.

3.4.1 Architecture of the Proposal System

The system will establish teacher’s pensioners' complaints help desks in all its liaison offices that

would be responsible for the resolution of pensioners’ complaints. The help desks will track and

resolve issues experienced by pensioners and also provide the necessary feedback to the admin

Head Office. In this regard, the admin will deploy a well-equipped call centre, which shall in the

minimum meet the following requirements: i) Technology to handle telephone calls with

Automatic Call Distribution (ACD) ii) Interactive Voice Response (IVR) system. iii)

Computerised Telephony Integration iv) Ability to record calls v) A Customer Complaints

Management System (CCMS) to capture all data and convert same to actionable information

58
 Employer Supervisors

Check documents
Retirement date and
years Cloud
DB server
Approval
Web server Verificatio
Department
n
Make report
Local government

DISTRIBUTED DATA PROCESSING

Rank (level)

Figure 3.2 System Architecture of the proposed system

The architecture of the existing system is made up of eleven (11) boxes, the employers is also

like an admin the employer enters the details of the employee, the retirement date is the date and

year that the employee retires from office, the department is where the employee served, the

local government is where the retired employee as served, the rank (level) shows where the

employee level ended before retirement (e.g. Level 3, 4, 5, 6, 7, 8 etc.). Supervisors then checks

the documents to verify against fraudulent activities. In this improved system the distributed data

processing does the verification and brings out the result.

59
The new system is an efficient way to develop a web based model for teacher pension

verification. All authenticities of all pensioners’ records are fully established prior to the

registration of the pensioners on the Pension database. In the case of deferred pensioners, the

database should flag their records pending when they become eligible to receive pension.

The verification process is done by the teacher at the comfort of their home will out visiting the

office.

3.4.2 High Level input put model

This talks about the interface that the user will use to interact with the program. The user will be

able to view the user profile, comment upload personal information for verification

MENU SELECT

Profile Update details Verify

Fig 3.3: input form of the proposed system

60
3.4.3 High Level output put model

The output design shows the process of check if document has being verify. After the user has

uploaded it. Automatically the system will compare the document will the existing document for

verification before the result will be sent to the user

Verify

Profile

Figure 3.4: Output Design

3.4.4 High Level Process Design

The process flow diagram represent the flow of data in the system, they will start by uploading

document than verify if it valid of not to the existing teacher record.

3.4.4 High level process design

The algorithm of this project is as follow:

1. Start

2. Login

61
3. If login= successful then

4. Enter service year

5. Verification of service year

6. If verification = valid then

7. Upload document

8. Verify

9. Else

10. Return to line 7

11. Else

12. Compare to the existing document

13. Approve

14. Stop

62
3.4.5 System Flowchart

Flowchart is a diagrammatic representation of an algorithm. It shows the logic behind an

application or a program.
Start

Login

No Yes
If login = valid?

Register

Enter service year

Database
Upload document

No Yes

If document = verified

63
 Not approve Approve

Stop User profit

3.4.6 Class diagram of proposed system

Figure 3.6 depicts the structure of the proposed system which comprises of its classes, attributes,

operations (or methods), and the relationships among objects.

Staff details 1 Verification

-Name +staff_id()
-address +year_of_services()
-dpartment +place_of_service()
-age
-year_of_services

Authentication

+username() System Database

+password()
+staff_id() -Staff name
-staff address
1 -years_of_service
-date
-staff_id

+staff_id()
PTAD
+search()
+staff_id()
+Staff_verification()
+year_of_servies 1
+place_of_service

64
Figure 3.6 Class diagram of proposed system

Figure 3.6 shows structure of the framework starting with identification process where you have

to train the system to save teacher history for future use.

3.4.7 Use Case Design:

A Use Case diagram graphically depicts the relationship and the interaction between the

systems. The Use Case diagram of our expert system in Figure 3.7 shows the Use Case diagram

of the proposed

Username & Password

Enter details

Load document

Teacher Verification

View Record

Search

Generate Report

Admin
Fig. 3.2 A Use-Case Model of the Proposed System

The Use Case diagram shows the actions of the two main actors of the system which are the

system admin and the teacher where the teacher will register as a new user this will enable him

65
to make proper use of the system and at the same time save his information, interact with the

system, while the admin has the access to update and generate report.

3.5 Database Design of the proposed System

Mysql Database System will be used to store information about the system. The various database

files that will be used in implementing the system are described below. The database design

represents the logical and the physical model. The logical model help to define the data elements

and their relationships while the physical data model help to design the actual database based on

the requirements gathered during the logical data modeling. The database contained the

following information. See table 3.1 and table 3.2 for more detail.

Table 3.1: logical Design of the database

Field Type Length

Staff name Varchar 20

Staff address Varchar 20

Staff year of service Varchar 20

Staff place of year Varchar 20

Staff_id Varchar 20

The Field in the database contain all the information within the table relevant to a specific entity

store into the database. In the proposed system the field entities are display in table 3.2 which

can be used in designing the form. When designing your database data type is important it help

66
to determine the type of record that will submitted in the database. While the length is the

character size that a particular filed can hold. The information in the logical model is very vital it

support decision making and analysis proposed, when making any analysis the gender and state

are selected to output the result.

Table 3.2 Physical Model of the database

Field Type Length

username Varchar 20

Password Varchar 20

The physical table contained login details of the individual there username and password this

with enable than login in the system.

3.6 Security mechanism of the proposed system

System testing is conducted on a complete integrated system to evaluate the system's compliance

with its specified requirements. System testing falls within the scope of black box testing and as

such should require no knowledge of the inner design of the code or logic. During system testing,

the focus is on the software design, behaviour and even the believed expectations of the

customer. So we can also refer to the system testing phase as the investigatory testing phase of

the software development life cycle. The system testing strategies used in this system include the

unit test and integration test. Maintenance would be seen in three areas in this research;

corrective maintenance, preventive maintenance and adaptive maintenance. Corrective

maintenance is a maintenance task performed to identify, isolate and rectify a fault so that the

failed system can be restored to an operational condition within the tolerances or limits

67
established for in-service operations. Necessary corrections in the form of removal, modification

or addition of program modules should be permitted by the software to allow for optimal use of

the application.

The preventive maintenance is to prevent the failure of software before it actually occurs. It is

designed to preserve and enhance software reliability by replacing error-prone components

before they actually fail. Recent technological advances in tools for inspection and diagnosis

have enabled more accurate and effective software maintenance. Measures like regular

diagnosis, database backups, creating system mirrors preserve the integrity of information stored

in the application. If these are strictly followed, limited instances of such occurrences would be

noticed in the use of the software application. Adaptive maintenance involves enhancing the

system by adding features, capabilities and functions in response to new technology, upgrades,

new requirements or new problems. Since the environment in which the application would be

running is dynamic, it should be made to suit whatever requirements that may change in the long

run.

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 CHAPTER FOUR

SYSTEM IMPLEMENTATION

4.1 Choice of Programming Language

The system was entirely developed using Java programming language. MYSQL was used for

the system database and backend validation.

The following programing languages were chosen for development of this project:

a. Hypertext Pre-processor (PHP)

b. Hyptertext Markup Language (HTML)

c. Bootstrap

d. MySQL

a. PHP: PHP is an acronym for Hypertext Pre-processor. It is a widely used open-source

general scripting language that is especially suitable for web development and can be

embedded into Hypertext Markup language (HTML). It is a C-base language and

therefore has the power of flexibility and also providing object oriented programming.

Php can also be used for command-line scripting and client-side GUI applications. Php

69
 can be deployed on most web servers, many operating systems and platforms, and can be

used with many relational database management system.

b. Hypertext Markup Language: HTML is short for Hypertext Markup Language. HTML

is used to create electronic documents (called pages) that are displayed on the World

Wide Web.

Hypertext Markup Language (HTML) is the standard markup language for creating web

pages and web applications. With Cascading Style Sheets (CSS) and JavaScript it forms a

triad of cornerstone technologies for the World Wide Web. Web browsers receive HTML

documents from a web server or from local storage and render them into multimedia web

pages. HTML describes the structure of a web page semantically and originally included

cues for the appearance of the document.

c. Bootstrap: Bootstrap is an open-source framework that combines HTML, CSS and

JavaScript code to help developers build web applications. Bootstrap can be used for

desktop and mobile development. There are built-in capabilities that automatically resize

an application, making it a smooth process to go from a website to mobile app. With

bootstrap, one can have access to built-in layouts, shaping of text and images, colors,

themes, buttons, menus, etc. the user interfaces are easy to use and build using bootstrap.

d. MySQL: MySQL is a relational database management system based on SQL –

Structured Query Language. The application is used for a wide range of purposes and is

used especially in a web database. MySQL is a freely available open source Relational

Database Management System (RDBMS). SQL is the most popular language for adding,

accessing and managing content in a database. It is most noted for its quick processing,

proven reliability, ease and flexibility of use.

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4.1.1 Justification of Choice of Programming Language

Java and MYSQL were adopted for this system implementation because it is great for

dynamic application development. One design goal of Java is portability, which means that

programs written in Java platform must run similarly on any combination of hardware and

operating system with adequate runtime support. This is achieved by compiling the Java

language code to an intermediate representation called Java bytecode, instead of directly to

architecture-specific machine code. Java byte code instructions are analogous to machine code,

but they are intended to be executed by a virtual machine (VM) written specifically for the host

hardware. End users commonly use a Java Runtime Environment (JRE) installed on their own

machine for standalone Java applications, or in a web browser for Java applets.

Standard libraries provide a generic way to access host-specific features such as graphics,

threading, and networking.

The use of universal bytecode makes porting simple. However, the overhead of interpreting

bytecode into machine instructions made interpreted programs almost always run more slowly

than native executable. Just-in-time (JIT) compilers that compile bytecodes to machine code

during runtime were introduced from an early stage. Java itself is platform-independent and is

adapted to the particular platform it is to run on by a Java virtual machine for it, which translates

the Java byte code into the platform's machine language.

4.1.2 Justification of Development Environment Used

The following features justify the use of the chosen environment(s) for development of

this research:

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a. PHP - a general purpose server side scripting language originally designed for web

development to produce dynamic web pages. It has the following features:

i. supports many databases (MySQL, Informix, Oracle, Sybase, Solid, etc.)

ii. runs on different platforms (Windows, Linux, Unix, etc.)

iii. is compatible with almost all servers used today (Apache, IIS, etc.)

iv. can be used in a standalone graphical application

v. is customizable, i.e. the open source license allows programmers to modify the PHP

software, adding or modifying features as needed to fit their own environments.

b. HTML: Html is the standard markup language for documents designed to be displayed

in a web browser. Its features are:

i. Html provides a means to create structured documents by denoting structural

semantics for text such as headings, paragraphs, lists, links, quotes and other items.

ii. Html elements are delineated by tags, using angle brackets.

iii. A Html web browser receives documents from a web server or from local storage

and render the documents into multimedia pages.

c. Bootstrap is a framework to help you design websites faster and easier. It includes

HTML and CSS based design templates for typography, forms, buttons, tables,

navigation, modals, image carousels, etc. It also gives you support for JavaScript plugins.

It has the following advantages:

i. A consistent framework that supports major of all browsers and css compatibility

fixes

ii. Fewer cross browser bugs

iii. Lightweight and customizable

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 iv. Responsive structures and styles

v. Several javascript plugins using the jquery

vi. Loads of free and professional templates, wordpress themes and plugins

d. MySQL: MySQL is a free-to-use, open-source database that facilitates effective

management of databases by connecting them to the software. It is a stable, reliable and

powerful solution with advanced features like the following:

i. Comprehensive Transactional Support

ii. Data Security

iii. On-Demand Scalability: MySQL offers unmatched scalability to facilitate the

management of deeply embedded apps using a smaller footprint even in massive

warehouses that stack terabytes of data. On-demand flexibility is the star feature of

MySQL.

iv. High Performance: MySQL features a distinct storage-engine framework that

facilitates system administrators to configure the MySQL database server for a

flawless performance. MySQL is designed to meet even the most demanding

applications while ensuring optimum speed, full-text indexes and unique memory

caches for enhanced performance.

4.2 Implementation Architecture

The new system is very easy to use. The input is made through the keyboard according to the

options given. The output of the system is also dependent on the input. The output is displayed

on the screen and printed as hard copy on paper when required.

It is schematically expressed thus:

Integrated
User software
DATABASE
Interface 73 engine
 v.
Input text
vi.

Display
output

Figure 4.1: Implementation Architecture

4.3 Testing of the System

The main purpose of this process is to make sure that the system is performing its intended

functions and operations sufficiently. Individual programs are run and tested for syntax and

logical errors. The screen output message and hints are all tested. There are two sources of data

testing:

1. Program test data prepared by the programmer

2. Live case-data supplied by the user

System proposed by the developer is used to value-fictitious asset. This test system should

consist of small number of data and should be generated to test every conceivable set of

conditions. Test system is useful to staff which have to undergo training on the use of the system.

However, from the data and knowledge extracted from domain experts, the Sentiment Analysis,

carries out its expected functions effectively.

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4.4 Performance Evaluation

Table 4.1 Performance Evaluation of the Existing System Result

Source: SPSS processed SMOS respondents input. SD = Standard Deviation)

S/N Question Patient End User Doctor End User Average Mean SMOS
Response Response (X) Automated
Remark

MEAN SD MEAN SD

1 The SHAP model for 2.75 1.07 2.67 0.99 2.64 Accepted
teachers pension has a
good graphical user
interface (GUI)
2 The SHAP model for 4.48 1.09 2.56 0.71 2.51 Fairly
teachers pension is fast accepted
in the validation of user
access
3 The SHAP model for 2.68 0.92 2.63 0.81 2.63 Fairly
teachers pension is accepted
accurate in the
prediction process
4 The SHAP model for 2.44 0.74 2.46 0.72 2.44 Rejected
teachers pension is fast
in the prediction process
5 The SHAP model for 2.59 0.99 2.63 0.90 2.57 Fairly
teachers pension is accepted

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 secured and reliable
6 Grand mean 2.59 0.78 2.68 0.67 2.52

SPSS = Statistical Package for Social Sciences, SMOS = SHAP Model Online Survey

Table 4.2 Performance Evaluation of the New System Result

Source: SPSS processed DFGOS respondents input. SD = Standard Deviation

S/N Question Patient End Doctor End Average SMOS

User User Response Mean (X) Automated
Response Remark

MEAN SD MEAN SD

1 The MLA model for 2.87 1.29 2.44 1.51 2.75 Accepted
teachers’ pension
has a good graphical
user interface (GUI)
2 The MLA model for 2.75 1.23 2.31 1.43 2.28 Accepted
teachers’ pension is
fast in the validation
of user access
3 The MLA model for 2.73 1.92 2.63 1.65 2.29 Accepted
teachers’ pension is
accurate in the
prediction process
4 The MLA model for 2.74 1.34 2.36 1.24 2.87 Accepted
teachers’ pension is
fast in the prediction

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 process
5 The MLA model for 2.65 2.99 2.78 1.12 2.57 Accepted
teachers’ pension is
secured and reliable
6 Grand Mean 2.74 1.78 2.71 1.67 2.57
SPSS = Statistical Package for Social Sciences, MLA: Machine Learning Algorithm

4.3 Comparative analysis of the existing and new system results

(Source: table 4.1 and 4.2 respectively)

Parameters Existing New System

System

Grand mean of user satisfaction

GUI 2.59 2.74

Accuracy of the prediction 0.78 1.78

process

Speed of the prediction 2.68/ 2.71

process

Speed in user validation 0.67 1.67

Security 2.52 2.57

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4.4 Discussion of Results

Table 4.1 Shows the Existing System Results by the SHAP model which also encompassed

implication of LightGBM, HGBoost, Random Forest and Decision Trees Techniques. There

were a total number of thirty-six records which also served as test-sets for analyzing the level of

productivity of staff in the university. The key indicators the Existing System model used in the

evaluation of performance and the model remarks/interpretation. The system predicted staff from

60% and above to be competent in performance, while staff within the range of 40% to 50%

were fairly competent in performance. A SHAP Model Online Survey (SMOS) of the existing

system was designed and deployed on the World Wide Web (WWW) alongside the program in

order for end-users to evaluate and give feedback on the system performance. The number of

respondents to the designed SMOS comprised of a Hundred and Seventy Three (173) of relevant

stakeholders in Tertiary Insinuations. Furthermore, the designed SMOS contained two sections A

and B. Section A elicited information on a demographic data of the respondents with three items

namely the name of the school, designation and years of experience of the relevant Stakeholders,

while section B elicited information from the prescribed survey questions.

The section of the designed SMOS is on a four point liker type scale as follows

i. Strongly Agree (SA) - 4points

ii. Agree (A) - 3points

iii. Disagree (D) - 2points

iv. Strongly Disagree (SD) - 1point

78
In addition, the designed SMOS was examined by experts in assessing students’ academic

performance. The construction of the SMOS was also guided by relevant supervisors and experts

in Tertiary Institutions, and the comment from the supervisors and experts in assessing staff’

academic performance were used to modify items in the questionnaire. To determine the

reliability of the designed SMOS, a robust-web-based was interfaced with the frontend of the

survey to enable rapid processing of the respondents’ input on the prediction of teachers’

pension. The authors further compared the performance of Light GBM with the prediction

performance of the other benchmark models trained using XGBoost, forest and decision trees.

Result from the study show that the Machine Learning Algorithm model emerged best with its

results being comparable to XGboost. Recalling the existing system architecture, the authors also

investigated which of the tree based algorithms performs better. They further utilized SHAP to

show the impact of each feature in evaluating staff performance. SHAP values are a powerful for

interpreting tree models and have guaranteed consistency in feature rankings compared to the

gain, or split count methods.

Table 4.2 shows result of the newly developed Machine Learning Algorithm model for the.

Teachers’ pension. The key indicators the newly developed model used in the evaluation was,

motivation, intellectual ability, prior knowledge, prediction rate of staff performance, and the

model remarks/interpretation. The system predicted staff from 60% and above to be competent

and productive in performance, while staff within the range of 40% to 50% were fairly

competent and productive in performance. Furthermore, the newly developed model utilized

machine-learning oriented algorithms such as deep neural network tor training and testing the

model for accurate evaluation of staff performance. Deep neural network is a subset of machine

learning in artificial intelligence (AI) that has networks capable of learning unsupervised data

79
that is unstructured or unlabeled. Deep neural network has evolved hand-in-hand with the digital

era, which has brought about an explosion of data in all forms and from every region of the

world. Machine Learning Algorithm is a branch of machine learning that is being utilized to

determine partial truth of a computing process using Boolean value which includes 0 and 1. Deep

neural network helps to solve a problem after considering all available data. Genetic Algorithm

is a machine learning algorithm that imitates the process of natural selection, it is used for

solving complex search optimization issues.

Genetic Algorithm is a machine learning algorithm that imitates the process of natural selection.

It is used for solving complex search optimization issues. This algorithm reflects the process of

natural selection where the fittest individuals are selected for reproduction. In addition, a Deep

Fuzzy Genetic Online Survey (DFGOS) of the proposed system was designed and deployed on

the World Wide Web (WWW) alongside the program in order for end-users to evaluate and give

feedback on the system performance. The number of respondents to the designed DFGOS

comprised of a Hundred and Seventy Three (173) of relevant stakeholders in teachers pension.

Furthermore, the designed DFGOS contained two sections A and B. Section A elicited

information on a demographic data of the respondents with three items namely the name of the

school, designation and years of experience of the relevant Stakeholders, while section B elicited

information from the prescribed survey questions. The section of the designed DFGOS is on a

four point liker type scale as follows:

i. Strongly Agree (SA) - 4points

ii. Agree (A) - 3points

iii. Disagree (D) - 2points

iv. Strongly Disagree (SD) - 1point

80
Also, the designed DFGOS was examined by experts in assessing staff quality content delivery

measuring model for effective measurement of productivity. The construction of the DFGOS

was also guided by relevant teachers’ pension, and the comment from the supervisors and

experts in assessing students’ academic performance were used to modify items in the

questionnaire. To determine the reliability of the designed DFGOS, a robust web-based backend

was interfaced with the frontend of the survey to enable rapid processing of the respondents’

input on the prediction of teachers’ pension

4.5 Result Presentation

In the proposed system Machine Learning Algorithm is used to predict whether or not a patient

will develop tuberculosis. Supervised learning classification is used for training the dataset.

Dataset was classified and split into a training set and a test set. Pre-processing of the data is

done and supervised classification techniques and random forest are applied to get accuracy

score. The dataset consists of eight main attributes used for performing the analysis. Various

promising results are achieved and are validated using accuracy and confusion matrix. The

dataset does not have any null values. But many outliers needed to be handled properly, and also

the dataset is not properly distributed. Two approaches were used. One without outliers and

feature selection process and directly applying the data to the machine learning algorithms, and

the results which were achieved were not promising. But after using the normal distribution of

dataset for overcoming the over fitting problem and then applying Isolation Forest for the

outlier’s detection, the results achieved are quite promising. Various plotting techniques were

used for checking the skewness of the data, outlier detection, and the distribution of the data. All

these preprocessing techniques play an important role when passing the data for classification or

prediction purposes. The symptoms of tuberculosis Coughing for three or more weeks, Coughing

81
up blood or mucus, Chest pain, or pain with breathing or coughing, Unintentional weight loss,

Fatigue, Fever, Night sweats, Chills, Loss of appetite. Table 3.1 below show the record of

different patient with different coughing ways. It is prove that patient with long coughing days

are not a high risk to have tuberculosis, due to the hearth as to pump more against this,

tuberculosis, which happens when the blood supply to your heart is blocked and heart muscle

begins to die without enough oxygen. The longer the blood flow is blocked, the greater the damage

to the heart. The algorithm that we have used in our model is NaiveBayes.

4.6 Documentation

Chapter one is the introductory part of this research work, it provides the context of the research,

the chapter two supplied the theoretical insights of the study which incorporates the related

theories and concepts to the research work. The chapter three examined the existing system and

provides the requirements for the design of the proposed system. Chapter four focused on the

implementation of chapter three and lastly, chapter five summarizes and concludes the research

work.

Hardware Requirements

The minimum hardware requirements for the system are as follows:

1. 500GB Hard Disk Drive

2. 6. Pentium 3 Central Process Units

3. Memory: 1GB-RAM and 256MB virtual memory, 120GB HDD

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4. Processor: Pentium processor or higher with minimum of 1GHz speed

Software Requirement

The minimum software requirements for the system are listed below:

A system should meet the following requirements for it to run the OVS:

1. MYSQL Local Server,

2. Xampp

3. Windows OS 10 , win 7 etc

4. Install the XAMPP software into the C drive following its interactive steps.

5. an Integrated Development Environment preferably Netbeans (IDE)

6. Mysql stand-alone application of version 5.5

7. Java Runtime Environment (JRE)

4.7 System and User Manual Setup

The staff quality and content delivery measuring model for effective measurement of

productivity is an automated and Internet-based software package. It is user friendly, interactive,

and also comes with a context of sensitive help system. Thus the user needs very little

information to actually start working with it, since it is capable of assisting the user to achieve

his/her goal to continue working with the system, insert the compact disk, Flash Drive or any

other storage devices containing the application into a computer system have both the software

and hardware requirements as stated in Install the XAMPP software into the C drive following

its interactive steps. After the installation, double-click on the XAMPP control panel icon on the

desktop then start APACHE and MYSQL. Go to notepad++ and start typing your program. After

typing, click file ->Save As-> locate XAMPP on the c drive, open it and open htdocs then create

a folder here and save your program with dot php extension.

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Operational Guide

The specific steps of operation of the system are outlined below:

1. Open a web browser (Chrome, Firefox, Opera)

2. Go to the URL address pane of the browser

3. Type in localhost/contentd/index.php

4. Click “Enter” button to navigate to the address

5. A homepage will display from where the users can then login or register

4.8 Source Code Listing

The source code is attached as appendix A.

Program Sample output

The program sample output is attached as appendix B.

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 CHAPTER FIVE

SUMMARY, CONCLUSION AND RECOMMENDATION

5.1 Summary

The study was carried out as a result of the constraint of proper evaluation of the teachers is why

they haven’t been able to get the actual evaluation of the teachers’ performance. The university

employers couldn’t properly evaluate the teachers because they don’t have the adequate

measures in carrying out the survey of such challenges breath weakness in value system reward,

performance, excellence, moral motivation and abuse of quality within the teaching hierarchy

and the management team of the university system. The study aimed at developing an enhanced

teacher pension verification system using distributed data processing; analyze the regular mode

of teachers’ pension verification system, design an improved model of enhanced teachers’

85
pension verification system using distributed data processing, implement the using BigQuery and

Databricks Lakehouse Platform, test the implemented model of an enhanced teachers’ pension

verification system, the waterfall model was adopted as the methodology employed to actualize

the systematic working of the system. The work was implemented using the following languages

the following programing languages were chosen for development of this project. Hypertext Pre-

processor (PHP), Hyptertext Markup Language (HTML), Bootstrap, MySQL and Java.

5.2 Conclusion

In this project we have successfully implemented an enhanced teacher pension verification

system using distributed data processing, the development of this system will help and assist

employers, lecturers, staff and students in the assessment of the lecturer and staffs and their

employees level of productivity and ease the stress in terms of promotion or assigning. Hence the

project can be useful to educational institutes and other organizations has it will help in the

attaining of level of staffs productivity and there delivery measurement.

5.3 Recommendations

The following recommendations are very necessary for successful deployment of the system and

of course all learning systems for general/public uses:

i. The users should enter the data correctly

ii. Teachers records should be made available for easy productivity measurement

5.4 Contribution of the Author

The study contributed the following improvements to teachers’ pension

i. An improved model for analyzing and integrating past records of staffs for evaluation

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 ii. A decision-support model for the management of tertiary institutions especially in the
selection of staff for evaluation
iii. A structured correlated framework for accurately predicting the performances in quick
response time.

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