issa 5th international research conference on social security pension reform in nigeria: how not to...
TRANSCRIPT
ISSA 5th International Research
Conference on Social Security
Pension reform in Nigeria:
how not to “learn from others”
Bernard H CaseyCass Business School
and
Jörg Michael DostalBrunel Business School
Pension reform in Nigeria:how not to “learn from others”
Outline
• Policy learning
• The new Nigerian system
• Assessing the system
• Governance issues
• A possible alternative for Nigeria
• Conclusions and recommendations
Pension reform in Nigeria:how not to “learn from others”
Policy learning
• Learning and pension reform– Chile’s 1981 reform– Nigeria’s Vision 2010 programme
• Comparing Chile and Nigeria
• Role of international organisations– IMF, World Bank and ILO
statutory pension age prior to reform
pension coverage rate (as % of work-force)
GNI per capita at PPP, current $
rural pop-ulation as % total population
informally employed as % of workers
life-expect-ancy at birth
age depend-ency rate (60+/15-59) actual and projected for 30 years male female
Chile c 1981
2,742 19 30 69.3 7.2 and 4.9 65 60 62
Nigeria c 2004
403 53 90 (inc SE) 43.5 10.6 and 10.2 60 60 8
Comparison of Chile prior to 1981 reformand Nigeria prior to 2004 reform
Pension reform in Nigeria:how not to “learn from others”
The new Nigerian system• Reasons for reform
– Characteristics of old system (NSITF)– Problems of arrears and cost control
• How new system works– Coverage– Contribution rates– Replacement rates– PFAs and NSITF as legacy– PenCom – the regulator
Coverage of pension schemes in Nigeria as % of total workforce
total workforce 100.0 - all in formal employment 10.0 --- federal civil servants 0.3 --- states and local government employees 1.7 ---federal police, security and military 0.3 --- para-statal employees 2.7 -- all public sector employees 6.4 ---contributors to NSITF 1.3 all in a pension scheme 7.7
Pension reform in Nigeria:how not to “learn from others”
Assessing the system
• Costs– Charges– Transition costs
• Contribution to economic development– Capital markets– Federal government bonds
Pension reform in Nigeria:how not to “learn from others”
Governance issues
• Corruption– Lack of rule of law
• Low regulatory quality– Presidential prerogative– PenCom, Transcorp and the Nigerian Stock
Exchange
Pension reform in Nigeria:how not to “learn from others”
A possible alternative for Nigeria• Social pensions
– ILO and World Bank perspectives– Poverty alleviation
• Proposed reforms in Chile– Failure of the 1981 system
• Suitability for Nigeria– Administrative capacity– Promoting legitimacy
Pension reform in Nigeria:how not to “learn from others”
Conclusions and recommendations
Recognise mistakes
Don’t copy failure
Learn, don’t mimic