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  • Yusufu Abdullahi

    Bamidele Ademola Olateju has tried to write a piece with classroom indices. First statutory retirement age of civil servant in Nigeria is 60 years, while University Professors and Judicial Officers have theirs above the civil servants. It iuis mandatory for civil servants to retire after 35 years of pensionable service. These rules are applicable in both defined benefits and contributory pension scheme the came into effect on 1st July, 2007 as duly specified in the National Pension Reform Act 2004. The defined benefits is a diminishing scheme as it affects the Federal Government and those States that have embraced the contributory scheme for their workers. The problem of defined benefits at the moment, is self inflicted by those who have been given the responsibility to run it at Federal level. Who are these people? The people Bamidele described that have low retirement benefits under the contributory scheme and do not have the benefit of defined scheme which source is the Government. They are the operator of the defined benefits at Federal level. We all heard of the estates being bought all over the places in prime States and Federal Capital. But this is little story to what the bomb shell will come with contributory pension scheme. First, the contributor, both the employer and the employee are expect to receive quarterly returns from the pension administrator from what the pension custodian has released for the quarter in the performance of the money in custody with him. In fact there are certain investment that the the employer can advice his pension administrator not to buy. These are currently not being done by both administrator and custodian. The little interest rate giving to depositors cannot make the scheme fruitful. The investment through States bonds is a complete misplacement of investment. If there is an infrastrure or estate, the investment from the contributory pension scheme should be tied properly to it. For instant, if a State wants to go into estate, proper legal instrument must be entered because majority of the investment fund coming from contributory funds would not be required at the same time, but trickle out as required and necessary. The estate’s gestation period would therefore be long enough to pay the principal and good returns and helps in the development of the state. Electricity and power. Do the same arrangement with proper legal instrument, borrow from the contributory pension funds, build thermal power stations, electricity infrastructures, collect bills and refund the funds over a long period of time. The country has gotten electricity the country benefits and employee receive enhance retirement benefits because it is his investment. THIS IS IN NUTSHELL WHAT CONTRIBUTORY PENSION SCHEME SUPPOSED TO DO. It is the difference between defined benefits which government must source every year together with its other expenditure without returns, while contributory is the problem of properly investment after funding the scheme by employer and employee.
    Former Director, Pension and Record 1984-88 and 2005-07.