INTRODUCTION
Many Nigerians today hardly come to understand what pension scheme is all about, though some employees have established occupational pension scheme while others have not appreciated the value pension scheme. The believe that too many security may lead to compliance and that social security schemes may lead to abuses such as premature retirements because of generous pension benefits and withdrawals of labour. However, such abuses should not retard the effort of the progressive employers from providing adequately for the needy.
While introducing the subject matter of this project, it is necessary that a brief definition of pensions be given. Pension is defined as a series of regular payment by an employer or the government to former employee who has reached his normal working life. This pension payment is due when an employee attains the age of 60 or 65 for all government establishment or at the point of disability or death.
According to the law of diminishing return, a stage is reached when the employees output is below the employers input on him. At such stage, it becomes absolutely necessary for the employee to stop working as his efforts are more or less being wasted. From the employers point of view such an employee security is provided during retirement since there is pension scheme arrangement.
Apart from basic importance of providing pension, here are others, and they include the purpose of pension scheme which make individuals have a sense of belonging, strengthens, and create foundation for industrial peace. It boosts employees morale attracts qualified personnel and promotes healthy labour management relation. Pension’s benefits are seen as the continuation of incomes to workers.
Thus, any pension scheme, which provides for periodic payment to retired employees with the facility of extending the benefits to eligible survivors, is usually acceptable to workers.
Now that the philosophy of setting up pension schemes in any part of the country whether privately administered (trust) or issued scheme has been established, the problems which the researcher wants to work on are number of income tax management act 1961 as applied and interpretation by the Joint Tax Board of Nigeria that left not reviewed even though most of them are outdated. The problems encountered by retired civil servant because of the use of term in funding method, the effect of inflation in pension fund and many other problems.
HISTORICAL DEVELOPMENT OF PENSION SCHEME IN NIGERIA
The controller (technical) African Alliance Insurance Co.Ltd. Mr. Ani Onifadem, in his address presented on the launching of a book “management of pension scheme in Nigeria” on 14th June 1998, said that although pension scheme has been running in the advanced countries ago, it was not until the year 1951 that Nigeria first had a legislation establishing a pension scheme for government employees. This legislation is known as the pension ordinance. It had retrospective effects. From 1st January 1964 its main feature were the provision of pension and gratuities by the government, generally in accordance to certain regulations which were amended from time to time.
Since 1951, many other enactments have been made on pensions, prominent among them is the pension Decree No 102 of 1979. Today, there is a Public service pension scheme (for government employees), and various private sector scheme in the country.
In Nigeria, pension scheme originated from the Royal Niger Company now United African company (UAC). The employees were concerned because there was no form of reward at retirement and so they teamed up and formed a scheme known today as pension scheme. The sole purpose of this scheme is to primarily provide income for people who retire at old age.
RESEARCH DESIGN AND METHODOLOGY
According to Eze (2005) Research design is specification of procedures for collecting and analyzing the data necessary to help solve the problems at hand, such that the difference between the costs of obtaining various levels of accuracy associated with level of accuracy is maximized.
Research design and technology tries to define the approach adopted in finding the study which include, source of data, population of the study, sample and sampling method, population of the study, sample and sampling method, validity of the instrument and method of data presentation and analysis, and data presentation and analysis.
