Classwork Series and Exercises { Business Studies – JSS2}: National Pension Scheme

Business Studies, JSS 2, Week 1

Topic: National Pension Scheme

Contents:

1. Meaning of pension
2. The National pension scheme
3. Objectives of the new contributory pension scheme
4. Advantages and disadvantages of the new contributory pension scheme

Meaning of Pension

Pension can be defined as a sum of money paid regularly to a person who no longer works because of age or length of year of service.

It is the regular payment made to a person on retirement for the remainder of hi

s or her life, the money is meant to sustain him/her for the rest of his/her life.

The National Pension Scheme

The national pension scheme is a federal government policy for the employees of both private and public sector in which the employers and employees will contribute a satisfactory percentage of the employee’s monthly income into. The employers  will then pay into the fund an appointed pension fund management company  which must be registered and recognized for that purpose by the federal government  through its supervising agent , the central bank of Nigeria.

Objectives of the new contributory pension scheme

1. To stem the growth of outstanding pension liabilities
2. To assist employees by ensuring that they save to cater for their livelihood during their old age.
3. To ensure that every pensioner who has worked in either the public and private sector receives retirement benefits when due.
4. To establish a uniform set of rules, regulations and standards for the administration and payment of pension fund in Nigeria

Advantages of the new contributory pension scheme

1. It is a means of providing employment opportunities for the youth
2. It helps the employers to leave a comfortable life in their old age
3. It reduced the hardship pensioners experience before they collect their pension benefits
4. It makes pension administration easy and lucrative

Disadvantages of the new contributory pension scheme

1. Some pension fund administrators unnecessarily delay payments
2. Offices of the Pension Fund Administration (PFA) are not located within easy reach of the workers
3. Some employers fail to pay the money ion behalf of their employees

Test and Exercise

1. ———— is the sum of money paid regularly to a person who no longer works because of age or length of year of service. (a) scheme (b) pension (c) allowance (d) salary
2. PFA stands for (a) Pension Fund Administration (b) Project For Administration (c) Pension Fund Alliance (d) none of the above
3. The following are the objectives of the new contributory pension scheme (a)It is a means of providing employment opportunities for the youth (b)It helps the employers to leave a comfortable life in their old age (c) It reduced the hardship pensioners experience before they collect their pension benefits (d)It makes workers lazy
4. State the advantages and disadvantages of new contributory pension scheme

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