Determinants of Accumulated Pension Funds under Defined Contribution in Nigeria

Abstract

Prompt pension payment at retirement to retirees is critical to survival of defined contribution (DC) pension in Nigeria. If all the expected contributions are not remitted before attaining retirement age, there will be delays for pension payments as unremitted funds are being awaited. This study is designed to investigate the extent of employers' contributions, role of Pension Funds Administrators (PFAs), regulator's roles, and funding gaps effect on accumulated pension funds. The population for the study comprised of all the federal universities in Nigeria. North Central part of the country was chosen among the six geopolitical zones in which three federal universities were selected. Purposive sampling technique was adopted to select 450 respondents based on their wiliness to participate in the research to ascertain their experiences in defined contribution pension system in Nigeria. Ordinary Least Square statistics was used to analyze collected data. Findings revealed that the employer's contributions, the regulatory role, and funding gap have positive and significant effect on accumulated pension funds while the role of PFAs has negative effect on accumulated pension. The study concluded that effective regulation of pension system will positively impact on adequacy of accumulated pension funds as the amounts representing funding gaps are expected to be remitted to employees' retirement saving accounts before retirement age is attained.