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Life after retirement has been a major concern to every worker. The level of preparation and confidence of employees towards retirement varies from culture to culture. In this research, effort was made to investigate the impact of emotional, attitudinal and financial aspects of retirement preparation on retirement confidence in Akwa Ibom State Civil Service. To achieve this, three research hypotheses were formulated, relevant literatures were reviewed and primary data were collected by means of researcher’s self-designed questionnaire. The survey research design was adopted. The study was based on 15,742 civil servants employed by Akwa Ibom State Civil Service. The sample size of 760 was determined using Thames formula. Simple percentages and simple linear regressions were the statistical tool used in analyzing the data. The analysis was done with the aid of statistical package for social science (SPSS) version 20. The three null hypotheses were rejected. It was found out that there was a positive and significant relationship between emotional preparation and retirement confidence; employees’ attitude has significant and positive influence on retirement confidence; and that financial preparation has significant and positive effect on retirement confidence. It was concluded that retirement preparation has positive impact on retirement confidence in Akwa Ibom State Civil Service. Recommendations were that the civil service commission should engage the services of psychologists to give counseling and training to employees on how to prepare their minds and emotions in anticipation of their retirement from service.



1.1             Background to the Study

Retirement from active service is an inevitable stage which one cannot resist as a worker. In other words, it should not be overlooked by a worker. There is need for every worker to make conscious efforts towards retirement preparation because the goal of every retiree is to ensure a comfortable retirement (Amune, Ardenojie and Obonyan, 2015). Every employee desires to live well during retirement without compromising on the standard of living in which they were used to while in active service. Bukoye (2010) avers that one of the biggest problems that confront a typical worker in his/her working life is his post retirement life.

A cursory observation of retirees in Nigeria indicates issues related to sudden loss of life, anxiety about a residential home, idleness and dwindling social status among others. This was as a result of the Pay-As-You-Go (PAYG) defined benefit which was the Nigerian pension system in government ministries. This pension system was determined by specific factors such as salary history and service duration and it was besetted by many problems. These problems ranges from administrative bottle neck in the payment of pension and gratuity, weak and inefficient administration, irregular payment of pension, poor funding as a result of inadequate budgetary allocation, corruption and embezzlement of pension and gratuities by pension administrators (Fapohunda, 2013). This necessitated the need to embark on reforms that will alleviate the plights of pensioners in Nigeria.

In 2004, the Pension Reform Act of 2004 was enacted and signed into law by the former President Olusengun Obasanjo to replace the pension Decree 102 of 1979. This new pension Act introduced a contributory pension scheme in both public and private sectors thereby making both sectors to have a uniform pension scheme. In order to ensure that the new pension reform is successfully administered and devoid of abuse, four institutions were involved in the administration of the new pension. These institutions are National Pension Commission (PENCOM), Pension Fund Administrator (PFA), Pension Fund Custodians (PFC) and Life Insurance Companies (Akpanmkpuk, 2011). This new act provides that every employee shall maintain an account (Retirement Saving Account) in his name with any Pension Fund Administrator (PFA) of his choice.

This new act made it compulsory for state and local governments to implement contributory pension schemes for their employees, but being confident about retirement requires more than just saving for retirement and providing statutory regulations. Retirement preparation calls for all round preparation from day one. Retirement concerns have emotional, attitudinal and financial implications that should not be ignored when preparing for retirement.

Emotional preparation has to do with mental preparation about retirement in general. It has multiple aspects to consider like dealing with the idle time available after retirement, maintaining the former life style, coping with spouse full time, loss of career, loss of various fringe benefits and loss of relationship at work. Few people consider emotional adjustment that accompany retirement stage and as such experience anxiety, depression and debilitating feelings (Chamberlin, 2014). Retirees in the new pension policy are now faced with the burden of being personally responsible for their financial future and psychological success as opposed to their predecessors who enjoyed the benefits of pension guarantees and more stable, social, economic and political environments. Such burden can result in feelings of anxiety and depression which impact on individual’s wellbeing (Kim, Kwon and Anderson, 2005). According to Kim et al. (2005), six action plan for a successful transition to retirement are: (a) pursue meaningful life and leisure activities/hobbies, (b) create new relationships and invest in already established ones, (c) establish social networks, (d) learn new skills and professional endeavours, (e) become active in projects that could not be pursued while working and (f) considering volunteer work.

Employee attitude towards retirement is influenced by factors such as social background, expectation of pension, self-esteem and identity (Mutran, Reitzes and Fernandez, 2004). Fapohunda (2013) opines that employees have negative attitude towards retirement because of the irregular payment of pension and gratuity as and when due. In Nigeria, pensioners face untold hardship due to delay in payment of pension and other retirement rights resulting in untimely deaths of some retirees; making retirement to be dreadful to employees. According to Bukoye (2010), planners adjust better to the transition to retirement because they have a sense of control and preparedness which invariably leads to greater confidence and satisfaction in retirement. Eyibe and Eyibe (2000) further suggest that planning ahead will enable an individual to look at all the factors that have bearing on life in retirement and pursue the realities from the outset.

Financial planning focuses on many important aspects of financial management which include savings, investment allocation, applying for government benefits, paying off debt, calculating monthly income, reviewing insurance needs and making budget. Thus, it plays a key role in preparing workers and retirees for long term financial security (Alessie, Vann-Rooji and Lusardi, 2011). Preparing for post-retirement financial needs for an example can be beneficial to individuals in several ways. People who prepare for their later life financial needs are more likely to have adequate resources in retirement (Ferraro and Su, 2009). They may also have more realistic expectations about their financial situation in retirement (Taylor-Carter and Cook, 2011). In addition, by making financial preparations, people may gain some control over their uncertain future (Hershey and Mowen, 2010). This can help reduce worries and anxiety about the future (Petkoska and Earl 2012). A study by Helman, Copeland and Van-Derhai (2014) shows that those who are financially prepared for retirement are confident about post working life.

Retirement confidence is driven by wealth, health happiness and engagement (Gist, Wu and Verman, 2004). Gist et al. (2004) posit that adequate planning to support one’s life style, understanding potential personal longevity and knowing the type of activities to be engaged in after retirement help boost one’s retirement confidence.  Research shows that an individual’s longevity is increased if they have positive attitude towards retirement (Lakra, Ng and Levy, 2012). Previous studies also showed that individuals who are confident about their retirement save sufficiently for retirement and are more likely to have easier transition into their post retirement life (Taylor and Doverspike, 2010). However, it is possible that some people feel optimistic about their retirement despite inadequate retirement savings.

Lloyd (2013) defines retirement confidence as being happy, healthy and financially secured during retirement. Retirement confidence gauges the views and attitudes of individuals regarding retirement, their preparation for retirement, their confidence with regard to various aspects of retirement and related issues (Joo and Pauwels, 2002). In Akwa Ibom State, Udofot (2012) asserted that retirees are among the poorest in terms of their standard of living and social wellbeing. Some retirees in the state are owed years of gratuities and pensions. This is not a good omen for those in service as it could affect their retirement confidence. My choice of the civil service is because it has the highest number of employees in the state, thus it has sufficient population to be used for the study.

1.2             Statement of the Problem

For decades, the public service in Nigeria had been operating the defined benefits scheme (DBS). This scheme was bedeviled by many problems such as administrative bottleneck in the payment of pension and gratuity, poor funding as a result of inefficient and inadequate budgetary allocation, corruption and irregular payment of pension and gratuity. The defined benefits scheme did not yield the desired result because retirees were still living in abject poverty, anxiety and suffer from idleness and dwindling social status. These and other problems gave rise to the enactment of a Contributory Pension Scheme (CPS) which was provided for in the pension Act of 2004. This amounted to privatization of pensions. This new pension system was based on individual retirement saving accounts managed by private financial institutions. What is most troubling is that when these funds collapse, there is no guarantee provided by government. The major provision of the Pension Acts of 2004 as amended in 2014 is to help shortsighted employees by ensuring they save so that they can cater for their living during retirement.  Over concentration of the Act on savings calls for questions as to whether savings was the only factor that could guarantee retirement confidence.

The decision to investigate retirement confidence was due to the fact that some people feel confident despite inadequate retirement savings. What factors could be responsible for the retirement confidence of people with inadequate retirement savings? Could it be the hope to engage in other productive ventures after retirement due to good health? The level of investment, insurance policy taken or social involvement scheme participated or could it be their mindset that anchors on retirement preparation? Since retirees are being faced with emotional, attitudinal, and financial challenges when preparing for retirement and for the fact that these issues are seldom researched upon; I tackled this question by examining issues bothering on the employees’ mindset towards retirement preparation. The aim was to investigate the relationship between retirement preparation and retirement confidence in Akwa Ibom State Civil Service by using variables such as emotional, attitudinal and financial dimensions.

1.3             Objectives of the Study

The general objective of this study was to examine the effect of retirement preparation on retirement confidence of employees in Akwa Ibom State Civil Service.

The specific objectives were:

i.                    to examine the relationship between emotional preparation and retirement confidence of employees in Akwa Ibom State Civil Service;

ii.                 to assess the influence of employees’ attitude towards retirement confidence in Akwa Ibom State Civil Service; and

iii.               to examine the effect of financial planning on retirement confidence of employees in Akwa Ibom State Civil Service.

1.4             Significance of the Study

This research aims generally at contributing significantly to both academic field and financial educators. Specifically this study will create awareness on the need for effective commitment to early preparation for all workers in service and those near retirement. It will provide ways through which a worker can prepare for his retirement. Also, it will be useful for financial educators and psychologists to advise clients about their retirement confidence. Furthermore, it will provide helpful insights to issues that mitigate retirement confidence.

This research will serve as a reference point to other researchers who might find it relevant and useful to their enquiries.

1.5       Research Questions

In order to obtain data needed for the study, the following research questions were raised:

i.                    What is the relationship between emotional preparation of employees and retirement confidence in Akwa Ibom State Civil Service?

ii.                 To what extent does employees’ attitude towards retirement affect retirement confidence in Akwa Ibom State Civil Service?

iii.               To what extent does financial planning affect retirement confidence of employees in Akwa Ibom State Civil Service?

1.6       Research Hypotheses

            The following hypotheses were formulated to be used in testing data that were collected.


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