Pension Reform evokes certain primary questions: what is a Pension System? What is its essence? Why do governments interfere in this area throughout the industrial world and increasingly in developing countries? (Modigliani and Murahlidhar, 2004). 2.1.1 The Concept of Pension
Pensions are a form of Social Security for the retired. It is meant to serve as a supplementary source of income to retired workers when their current earning power ceases (Modigliani and Murahlidhar, 2004). It has been defined as "a sum of money paid regularly to a person who no longer works because of age, disablement etc., or to his widow or dependent children, by the state, by his former employers or from funds to which he and his employers have both contributed" (Onifade, 2001). According to the third edition of Longman Dictionary of Contemporary English (2000), the word Pension is an amount of money paid regularly by a government or a company to someone who is officially considered to be too old or ill to earn money by working. Alternatively, pension can also be defined as periodic payment to one who retired from work as a result of old age or disability (Chinwuba 2004). 2.1.2 The Concept of Pension Scheme
A Pension Scheme or System however, is the totality of plans, procedures and legal processes of securing and setting aside funds to meet the social obligation of care which employers owe their employees on retirement or in case of death and disability (NICON, Abuja). It serves as a structured method of providing economic security to an individual when he can no longer support himself. As a pre-arranged and well thought out plan, it gives the beneficiaries the confidence that the benefits promised are being properly arranged and will be paid at the appropriate time (Onifade, 2001). It can also be viewed as a financial plan by which a worker's benefit is provided whenever it falls due according to the rules of the plan (Chinwuba 2004). 2.1.3 The Essence and Features of Pension...
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