INTRODUCTION

I.0 Introduction

A pension is a contract for a fixed sum to be paid regularly to a pensioner, typically following retirement from service. It is different from severance pay because the former is paid in regular installments while the latter is paid in one lump sum. A pension plan created by an employer for the benefit of employees is commonly referred to as an occupational or employer pension. Labour unions, the government and other organizations also fund pensions. Occupational pensions are a form of deferred compensation, usually advantageous to employee and employer for tax reasons. Many pension plan also contain an additional insurance aspect, since they often will pay benefits to survivors or disabled beneficiaries. The common use of the term pension is to describe the payments a person receives upon retirement, usually under pre-determined legal and/or contractual terms. According to Adams (2005) pension is the amount paid by government or company to an employee after working for some specific period of time, considered too old or ill to work or have reached the statutory age of retirement. It is equally seen as the monthly sum paid to a retired officer until death because the officer has worked with the organization paying the sum. Adebayo (2006) and Robelo (2002) asserted that pension is also the method whereby a person pays into pension scheme a proportion of his/her earnings during his working life.

The contributions provide an income (or pension) on retirement that is treated as earned income. This is taxed at the investors marginal rate of income tax. On the other hand, gratuity is a lump sum of money payable to a retiring officer who has served for a minimum period of time. A greater importance has been given to pension and gratuity by employers because of the belief that if employees’ future needs are guaranteed, their fears ameliorated and properly taken care of, they will be more motivated to contribute positively to organization’s output. Similarly, various government organizations as well as labour unions have emphasized the need for sound, good and workable pension scheme. To manage pension effectively there is need to manage the payroll with the use of automated systems.

According to Wikipedia (2012), payroll is the sum of all financial records of salaries for an employee, wages, bonuses and deductions. In accounting, payroll refers to the amount paid to employees for services they provided during a certain period of time. Payroll plays a major role in a company for several reasons. From an accounting perspective, payroll is crucial because payroll and payroll taxes considerably affect the net income of most companies and they are subject to laws and regulations (e.g. in the US payroll is subject to federal and state regulations)A payroll accounting system is a computerized system that enables payroll records to be captured and computed so that it will be easy for retrieval and confirmation of supposed payment salary values for staffs. With computers now driving virtually all business activities, payroll accounting system is one of such systems that make it easy for organizations to perform payroll related information in electronic format as opposed to the manual method. A pensioner’s payroll system is an automated system that can aid easy computation and recording of pension payment records for easy access to pension information and quick payment for those involved.

Employee benefits are elements of remuneration given in addition to the various forms of cash pay. Pension is one indispensable form of employees’ solid benefits which has positive impact on employee discipline, loyalty and willingness to remain in the service of an employer, commitment to the attainment of job goals and concern for the survival of the organization. An occupational pension scheme is an arrangement under which an employer provides pension for employees when they retire or gives deferred benefits to members who leave. It is a system designed to provide the employees of an organization with a means of securing on retirement a standard of living reasonably consistent with that which they enjoyed while in service. Pension and related issues have received significant attention in many countries over the past decades. There are new changes in the way pension assets are managed and benefits are distributed to beneficiaries due to the difficulties associated with the pension schemes previously in existence. Robolino (2006) notes that many countries have opted for different forms of contributory pension schemes, in which employees and their employers are expected to pay certain percentages of their monthly earnings to a Retirement Savings Account (RSA) from which they would be drawing their pension benefits after retirement. Pension reflects money withheld during the period of employment and returned with interest to an employee after cessation of work, that is, at retirement. A retirement scheme is a way of providing an employee with either a lump sum of money when leaving the service of an employer or providing a pension to the employee. It provides benefits which can be regarded as compensation to an employee for the services rendered to the organization.

Over the years the management of pension scheme in Nigeria has been inundated by multiple and diverse problems such as inadequate funding, inadequate subventions and grants, poor documentation and filing in pension offices, direct release of pension funds to underwriters, accumulated arrears of pensioners, inability to determine appropriate investment portfolios, lack of accountability, corruption and embezzlement of funds. The use of the manual system of recording pension payroll information poses many significant problems. Payroll information cannot be easily retrieved in the manual system. In addition, the manual system is associated with computation errors and they cannot be easily corrected without causing more errors and indecency of the recording material. Management cannot get needed information instantly. In view of these problems, a pension payroll accounting system is needed to facilitate the operations of pension payment.

• Aim and Objectives of the study

The aim of the study is to design and implement a pensioners payroll system that will facilitate the accountants involved to record and make payroll computations with minimal stress and also to facilitate the retrieval of pension payroll information.

The following are the objectives of the study;

• To implement a database system to manage pension payroll information
• To design a system that will facilitate computation of pension payroll details
• To implement a system that will facilitate updating of pension payroll records
• To implement a system that will aid querying of pension payroll records

This study covers the design and implementation of a pensioners payrolling system a case study PENCOM Uyo.

1.5 Significance of the study

The significance of the study is that it will provide a more effective and efficient system for PENCOM to facilitate the capturing and computation of pension payroll records so that it will be easy to retrieve needed information pertaining to pension payroll. It will also serve as an information system to the management of the organization. The study will also be useful to other researchers seeking related information.

1.6 Organization of Research

This research work is organized into five chapters. Chapter one is concerned with the introduction of the research study and it presents the preliminaries, theoretical background, statement of the problem, aim and objectives of the study, significance of the study, scope of the study, organization of the research and definition of terms.

Chapter two focuses on the literature review, the contributions of other scholars on the subject matter is discussed.

Chapter three is concerned with the system analysis and design. It presents the research methodology used in the development of the system, it analyzes the present system to identify the problems and provides information on the advantages and disadvantages of the proposed system. The system design is also presented in this chapter.

Chapter four presents the system implementation and documentation, the choice of programming language, analysis of modules, choice of programming language and system requirements for implementation.

Chapter five focuses on the summary, constraints of the study, conclusion and recommendations are provided in this chapter based on the study carried out.

7 Definition of terms

Accounting  the activity, practice or profession of maintaining the business record of a person or organization and preparing forms and reports for tax or other financial purposes.

Gratuity: A reward, service or payment provided freely, without obligation.

Payroll  A list of employees and their salaries or wages.

Pension: A gratuity paid regularly as benefit due to a person in consideration of past services; notably to one retired from service, on account of retirement age, disability or similar cause.