EVALUATING THE FINANCIAL SUSTAINABILITY OF LUMP-SUM PENSION BENEFITS FOR EARLY EXITED STAFF IN NIGERIA

Abstract

The pension scheme is a fully contributory pension scheme in Nigeria, and it provides guidelines for the optimal operations of the RSA for all ages eligible. Presently, people between the ages of 18 and 49 who are victims of appointment termination, organizational restructuring etc find it difficult to access a lump sum from the RSA for a better life. Why do victims of job loss believe in the legitimate theory that society and business have a social treaty, the stakeholders’ theory portrays an organization to have a moral and ethical responsibility to consider the interests of all stakeholders. This study evaluated Financial Sustainability of Lump-Sum Pension Benefits for Early early exited staff in Lagos State. The study population comprised 114 people between the ages of 18 and 49 who had lost their jobs and kept an RSA with a particular Pension Fund Administrator (PFA). A cross-sectional research design and a purposive sampling technique were used. 89 persons were purposively selected for the study. Cronbach's Alpha coefficient was used to test the reliability of the research instrument. The data was analysed using descriptive statistics. The findings of the study show that 25% withdrawal from the RSA, and restriction in lump-sum payment affect the financial sustainability of early exited staff in Lagos State, Nigeria. The study concluded that there is a need for lump sum payments beyond the 25% threshold for early exit staff. On that basis, the study recommended that the pension commission should develop a strategy for early exit staff to leverage their RSA for business and financial sustainability.