Delayed payment of gratuity, pension, and post-retirement conditions

Abstract

The value of retirees' gratuity and pension will continue to grow as individuals reduce their reliance on family members to care for them in old age and accept the truth that they must care for themselves by saving for the future. Benefits for retirees have piqued the interest of policymakers and experts worldwide. Numerous articles have been written to assess Nigeria's previous pension system, the reasons for its failure, the shortcomings of the new pension system, and the influence of both the old and new pension systems on pensioners' wellbeing in Nigeria. Nonetheless, no study exists in Nigeria on the effect of delayed gratuity and pension payments on post-retirement situations. To close this divide, this study explores the effect of delayed gratuity and pension payments on retirees' willingness to keep their current position in Nigeria. This study analyzed secondary data obtained from published and unpublished books, journal articles, and online sources. It used content analysis to determine the relevance of the material collected to the study's scope. The study shows that delayed gratuity and pension payments contribute to pensioners' diminishing status, deteriorating health, and premature mortality shortly after retirement. The study consequently suggests that both public and private employers of labor do regular pre-retirement training for their employees to avoid the shame of seeing their retirees become penniless on the streets or succumb to an early death shortly after retirement.

Pay As You Earn (PAYE) Tax as Panacea to Backlog of Gratuities and Pensions of Civil Servants in Nigeria

“…On pooling total collections of the PAYE tax at the end of each year, the state governments should use same to offset liabilities of retirements benefits. This in turn may eliminate the prevalence of serious social problems, deteriorating health and premature death of retirees due to non-payment of retirement benefits (Okolie & Idibra, 2022;Udom, Ukommi, & Ekanem, 2022). In practice, the ability of the state governments to pay-off the retirement liabilities of civil servants may give the retirees peace and stability of minds, make investment decisions, become engaged in other life endeavors post-retirement and may make serving civil servants to be more loyal and committed to the service.…”

“…On the other hand, pension is an amount set aside either by an employer or an employee or both to ensure that employees have something to fall back on as income on retirement. Thus, it is aimed at providing workers with security of guaranteed income when they retire or to their dependents when death occurs (Okolie & Idibra, 2022).However, in 2004, an Act on retirement benefits was enacted and based on its provisions, it is contended that payment of gratuities is abolished while pension has become a contributory scheme between the employer and the employee under the Contributory Pension Scheme ([CPS] Pension Reform Act, 2004). However, this is largely implemented at the federal level while at the state level, total of 25 states have enacted laws on the CPS, 7 states are still at the bill stage while four states are operating other pension Schemesas at 31 st December 2021.…”

“…Delayed payment of retirement benefits has affected payment of school fees and feeding family dependents and reduces the social standing of retirees in their communities (Udom,Ukommi, & Ekanem, 2022). Indeed, delayed payments of gratuities and pensions are contributing to pensioners' diminishing status, deteriorating health, and premature mortality shortly after retirement (Okolie & Idibra, 2022). This is coming at a time when payments ofthe benefit of retirees has recently attracted the interest of policy makers and researchers globally (Fiiwe, 2020).…”

Pay As You Earn (PAYE) Tax as Panacea to Backlog of Gratuities and Pensions of Civil Servants in Nigeria

“…On the other hand, a pension is an amount set aside by an employer or an employee to ensure that employees have something to fall back on as income on retirement. Thus, it is aimed at providing workers with the security of guaranteed income when they retire or to their dependents when death occurs (Okolie & Idibra, 2022). However, in 2004, an Act on retirement benefits was enacted, and based on its provisions, it is contended that payment of gratuities is abolished while pension has become a contributory scheme between the employer and the employee under the Contributory Pension Scheme ([CPS] Pension Reform Act, 2004).…”

“…Delayed payment of retirement benefits has affected payment of school fees and feeding family dependents and reduces the social standing of retirees in their communities (Udom, Ukommi, & Ekanem, 2022). Indeed, delayed payments of gratuities and pensions contribute to pensioners' diminishing status, deteriorating health, and premature mortality shortly after retirement (Okolie & Idibra, 2022). This is coming at a time when payments ofthe benefit of retirees has recently attracted the interest of policy makers and researchers globally (Fiiwe, 2020).…”