ANNUITY MARKET AND PAYOUT PHASE OF ACCUMULATED PENSION FUNDS IN NIGERIA
ANNUITY MARKET AND PAYOUT PHASE OF ACCUMULATED PENSION FUNDS IN NIGERIA
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Date
2012-10
Authors
SAMBO, Halimah Sani.
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Abstract
ABSTRACT
Researchers and policy makers throughout the developed and emerging economies in the
world have devoted substantial effort to exploring what motivates individual asset
accumulation patterns. It is during the accumulation phases that a society seeks to build
up resources adequate to finance retirement. The overall intention of these reforms has
been to ensure financial stability so as to influence retirement security. This inherent
risk was what brought about the change in the pension system of most countries and to
sustain it the proper regulations has to be adopted in the form of shift to the Newly
contributory scheme in 2004. The objective of this study is to find out the extent to which
stakeholders in the pension industry perceive the impact of annuities in financing
retirement in Nigeria. The study adopted historical and survey research design to gather
both primary and secondary data. Data for this study were analyzed using both
descriptive (mean, percentages and ranking).The scope of the study is 2004 to 2010. The
study employed the Cochran sample size formula on the two categories of the study
population (stakeholders and retirees) and chi-square was used to test the hypothesis. A
total of 713 copies of the questionnaire were administered but only 155 for the
stakeholders and 136 from the retirees were returned. Our findings show that annuities
have significant impact on financing retirement in Nigeria, those that are familiar believe
in annuity due to awareness. Thus, the stakeholders are aware of annuities and they
perceive it to be important. This implies that there is significant relationship between
publicity for annuity market and its impact on financing retirement. The study also
established that, the more publicity given on annuity market, the more will be its possible
impact on financing retirement in Nigeria. This implies that, an improvement in the legal
and regulatory framework for the payout phase of pension scheme is required. The study
found out that these categories of respondents, stakeholder’s who perceive the impact of
annuities on retirement financing to be significant had 56.8% while the retirees don’t
know annuities had 61.8% who say they disagreed or are undecided with the
establishment of annuity market. The study therefore, concluded that annuity markets are
important in financing retirement, specifically in the payout phase of the defined
contributory scheme. The study recommends the development of annuity market for
retirees to purchase a means of receiving retirement income until they die.
Description
Department of Business Administration
Faculty of Administration.
Keywords
ANNUITY,, MARKET,, PAYOUT,, PHASE,, ACCUMULATED,, PENSION,, FUNDS,, NIGERIA.