An Assessment of the Impacts of the Pension System Reforms on Employees’ Performance and Retention in Nigeria Distilleries Limited, Lagos Nigeria

Abstract

Consequently, upon many decades of inefficient and corrupt pension management system in Nigeria, public servants in Nigeria dreaded retirement because of the reported plight of retirees who were seen dying on queues or living under the bridges at the Federal Capital City of Abuja. While an average worker in other parts of the world looks forward to a decent and enjoyable post-work life, Nigerians lived in fear of ageing and retirement resulting in several malpractices such as multiple declarations of age with intent to keep them at work far past the official retirement age. Factors arising from pension inadequacies, poor funding, embezzlements and long arrears especially in the public sector led to the initiatives for restructuring of the country’s pension system and the enactment of the Pension Reform Act of 2004 and its review Act of 2014. The reforms aimed at making pension administration more effective, efficient, to make and improve on the question of adequacy and fund security. However, key problems in the management of the new pension system involve the perception of the degree and significance of its impact and whether key objectives are satisfied according to the intent of the reforms. This study was designed to examine whether the reforms have contributed significantly to addressing employees' post-work-life concerns and how such assessments impact their performance. Specifically, the paper examines if a relationship exists between the new pension reform act and employee retention, as well as organizational performance using a sample of employees of Nigerian Distilleries Ltd. Three hypotheses were tested at a 0.05 level of significance, using the inferential statistics of Regression Analysis with the aid of Statistical Package for Social Sciences (SPSS version 20). The findings show that there is a significant relationship between the New Pension Reform Act and employee’s performance. Also, the New Pension Reform Act has a positive effect on employee retention, compensation design must reflect this option in order to attract, motivate and retain employees. With further evidence that the pension system has the propensity to align the individual and corporate goals by increasing their job commitment, performance and motivation, the paper concludes that proper implementation of the provisions of the pension reform act is a prerequisite for achieving its objectives.