Options for retirement benefit payout under the Nigerian pension reform act of 2014 which is better between annuity and programmed withdrawal

Ashim Babatunde Sogunro

Abstract

This study investigates the most appropriate payout methods for retirees at the time of retirement that will enable potential retirees to live a life of luxury and comfort after they leave service. The aim of this paper refers to study the actuarial fundamental rules in practice and assumptions, as well as a framework of research methods and techniques to calculate the two payout options specified in the 2014 Pension Act. Moreover, the particular point is paid an attention to look into detail about the basis of potential retirees’ accumulated retirement contributions in their retirement saving accounts, as well as data on retirees from Nigerian academic federal university staff who are entitled to monthly benefits in addition to lump sum payments when they retire. The findings show that purchasing an annuity is preferable to a programmed withdrawal on a set schedule. As a result, employees may consider obtaining an annuity to benefit from long-term income flow for better living conditions in old age as well as to safeguard their retirement assets from outliving them. Keyword: Pension, Programmed-withdrawal, Annuity, Contributory-pension, Retirement

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