Workers’ Perception of Retirement and Its Implication on Productivity

Workers’ Perception of Retirement and Its Implication on Productivity (A Study Of Federal Polytechnic, Oko)

Retirement being a relative concept was reviewed differently by people. Rose Moses in a business champion magazine of March 16, 1999 stated that “retirement is obviously a phase in one life which must be planned for to avoid embarrassment when one eventually get there, though the idea of retirement sends a cold wave through the spines of so many workers. It could on the other hand be a thing of pride provided it is properly planned for”.

Bromely (1966) expressed his opinion that retirement have varying meanings depending of the sex, socio-economic and psychological make-up. Furthermore, he concluded that people disengage from their profession and this brings about a number of changes in their life in their daily activities, social contracts and standard of living.

Osuala (1986) on the other hand, he observed that one of the commonest mistake people make about retirement is to assume that it requires no effort, no preparation but some people, they assume that retirement may be treated as one big holiday. This he argues that, there are many aspects of retirement, apart from the financial area which calls for careful thought and planning well ahead of time. Such issues are as duration in service, age, as well as health-care are all important. However, Pitch (1974) insisted that retirement does provide opportunity to develop talents and interest that have always been there but have not gotten the time to be fully involved.


2.1   Workers Perception of Retirement and their Productivity

The findings from quantitative analysis suggest that age has a significance moderating impact on the way employees perceive the four traditional retirement factors (intrinsic, health, financial and organizational policies and practices). Similarly, the findings from the quantitative analysis suggest that employees’ perception of autonomy in relation to when they retire are significantly affected by these four traditional retirement factors with the factors of financial and organizational policies and practice being the two significant factors.

The four traditional retirement factors determine how the workers put in their best in the organization. When workers discovers that with the organizational and financial policies of their organization, when they retire that they won’t be able to leave up to their expectations, they will start manipulating their activities towards their personal benefits without consideration to the goal of their organization. Manipulation of data and financial records of the organization in order to enrich themselves may now be the things the workers could think of when they discovers that their retirement will not favour them.

When workers starts perceiving their retirement period positively, it will make them to put in their best at their working place thereby increasing their productivity, but whenever they start perceiving negatively, they will start exhibiting some wrong and destructive attitude that are dangerous to the growth of the organization.


2.2   Workers Pre-retirement and Post-retirement Policy

The new Pension Act 2014, hope for Nigeria workers. A pension is a fixed sum of money to be paid regularly to a person. Typically following retirement from service, there are many different types of pensions including defined benefits plans, contributory scheme, defined contribution plans as well as several others.

It is quite sad that some people still associate pension with old age. For the larger percentage of employees who have been involved in the pension contributory scheme have a better idea of what the scheme is all about and its important for every employee in days of active service to concentrate on their pension contributions from the first day of employment.

On 1 July, 2014, President Goodluck Ebele Jonathan signed into law the “Act”, which repeals the pension Reform Act 2014. The new act serves as the enabling legislation for the administration of the contributory pension scheme. Act has some major amendments which everyone, employers and employees should find quite existing just as one do and benefit from the major changes which were made in this new act to alleviate the suffering of the Nigerian employees from the shackles of pension problems which the former act did not address. Some of the major changes are highlighted below:


  1. Participation and Control

The scope of the participation of the contribution pension scheme for employers in the private sector has been decreased from minimum of five members to three employees which enables wider participation for the informal private sectors, which is wonderful development for employees in small scale employment, and they are not left out of the contributory benefits to secure their future. This is also an increase in the rate of contributions; under the act, employers are to contribute 12% of the monthly emolument which was previously 7.5%, and the employees on the other hand are to contribute 8% which was previously 7.5%.

For an employer that bears the total pension contributions of its employees, they will be expected to make 20% contribution. These contributions are applicable on monthly emolument only. It is important to note that the scope of the monthly emolument has been given a wider definition than before i.e. monthly emolument under the act is defined as the total emolument but shall not be less than a total of the basic salary, housing allowance and transport allowance.

  1. Sanctions and Punishments

The act now empowers the National Pension Commission to institute criminal proceedings against employers for persistent refusal to remit pension contributions subject to the fiat of the Attorney General of the Federation, which will be to the delight of employees right now. Furthermore, pension operators who mismanage pension funds are liable of convictions to not less than 10 years imprisonment and or fine of an amount equal to three times the amount so misappropriated or diverted now.

As it is clear that the benefit of pension is on the high side, some adamant employees still refuse to join this scheme. The Pension Act 2014 takes good care of those categories of staff by compelling an employer to open a Temporary Retirement Saving Account (TRSA) on behalf of an employee that failed to open a RSA within three (3) months of assumption of duty.

  • Recovery of Pension

The employees who have been involved actively in the contributory pension scheme often complain about recovery of pension after job; the worry centres around the stipulated waiting period after a job loss, the new act has not given us a reason to smile as the act has reduced the waiting period for accessing benefits in the event of loss of job by employees from six (6) months to four (4) months.

Finally, it is clear that the new Pension Act 2014 is quite advantageous to the employees as some key issues have been addressed such as upward review of the penalties and sanction enhanced sectors participation, upward review of rate of pension contribution, opening of temporary retirement savings account for adamant employees and access to benefits in the event of loss of job.


2.3   Workers’ View about Retirement and Its Policy

Ozugha (1986) in her study observed that Nigeria never speak differently about retirement. She discovered that about 70% of the people she studied were happier when they were working than when they retires while 25% of them said, they were happier now they have retired because they had pre-retirement anticipation and had prepared for their retirement life. She went further to state that retirement is a golden opportunity for any fortunate officer who by grace and love of God reached retirement. She also said that, it is for one to retire when he or she is still capable of performing some work rather than waiting until one is obviously incompetent and other are anxious to go. It is due to lack preparation and failure to realize that retirement is something that leads to so much happiness and also many look forward to a new found freedom and find only boredom and apathy in an empty and useless life.

Furthermore, on the view of workers retirement and its policy, Archley (1979) identified seven phases of retirement namely: the remote phase, honey-moon, disenchantment, re-orientation, stability and termination phase.

The first two was classified by him as pre-retirement era while others are the actual retirement.

  1. Remote Phase: This is the awareness of the fact that the time of retirement is approaching and the employee is mainly concerned with financial security and leisure skills.


  1. Near Phase: This is the phase at which the full significant of retirement being to sink in, at this time, the actual retirement has not taken place but the employee also tends to avoid participation in long term programmes.
  • Honey-moon Phase: in this phase, the actual retirement has been effective and the employee discovers that he does not have to report to anybody. This phase is characterized by traveling, visiting friends, relatives and so on.
  1. Disenchantment Phase: Some people might not go through this phase. It is especially for people who did not develop other interest and skills.
  2. Re-orientation Phase: At this phase, the retiree tries to adjust to a new lifestyle. This he can do by becoming more involved in the activities of the church and community.
  3. Stability Phase: Here, the retiree has mastered his new condition. He becomes considerably busy and highly involved in the task which he set himself to.


  • Termination Phase: In this phase, the retiree is no longer self sufficient due to advancing age, he may even eventually die.

It could be said from the literature so far reviewed that workers who had a positive view about retirement and its policy enjoys their retirement more than those who had a negative view about retirement. Retirement being an inevitable part of a worker’s life should be welcomed by people and seen as an unavoidable track of a worker’s life. You can imagine how it will look like if there is no retirement, people would have been dropping dead in several occasions in most offices and organization.

Ofoto (1996) stated that retirement is the process of concluding the nature of worker’s service in the organization or government system. It is referred to as the time when an employee reaching the end of his working life. In the above context, retirement is an unavoidable part of a worker’s life. Either the worker retires voluntarily or mandatorily at the age of sixty years or thirty-five years of service, whichever that comes first.


2.4   Summary of Literature Review

The review of related literature under study will examine the workers’ perception of retirement and its implication for productivity using Federal Polytechnic, Oko in Orumba North Local Government Area of Anambra State as a case study. The workers’ salaries are bound to affect the mode in which they see the retirement period and provide possible means of tackling those problems. It also wanted to know if the workers themselves caused the problem for themselves or was it caused by the management.

It will also provide information for modifying the retirement policy in Nigeria to prepare the workers mind towards retirement and this will help them to plan ahead of time so that they will not be taken by surprise, because, when they must have prepared their minds towards it, they will always be ready for it and make some savings as regards to it. It is also working towards harmonizing the salaries of those retirees who are dying in silent, when this has been done, it will help to prolong their lives.

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