Public Pension Agency Challenge - Essay Example

Public Pension Agency Student’s Name Course Professor Institution City Date Public Pension Agency Challenge Background Pension refers to a fund into which a sum of money is added during an employee’s employment years and from which payments are withdrawn to support the person’s retirement from work. Public pension agency was established under the name of “Retirement Pension Department.” In 1378 H corresponding to 1958 G under the provisions of Article “8” of the pension scheme issued in the same year. In 1423 H the cabinet passed the resolution NO 277 to turn the Retirement Pension Department into a public organization of a legal personality and independent budget that is administratively and financially independent under the name of “Public Pension Agency.”  Situation Analysis Over the past years, the number of retirees has increased significantly in both military and civil sectors. This increase has been caused by the age limit that has been put in place to limit an employee’s maintenance of service. The age is defined and expected to be standard unless there is urgent need to extend an employee’s period of service even after he or she exceeds the stipulated age. Currently, the contributors to the fund are around 2 million. This growth is coming with challenges to the agency. Some of the challenges include; information collection difficulty, lack of data on the contributors, inability to review sums of money sent by other government sectors, difficulties in collecting the contributions and having people back to their jobs still receiving the funds. Scope and objectives of the recommended changes The key challenge that the agency is facing is on the information they have on the contributors. The changes that will therefore be recommended will be to improve the information collection process and also ensure that the agency has the required information on the contributors. For a sector of the government such as this, quality and adequate information is required. The reason being, the payments made are based on the information that is available. This also calls for the information to be credible, very genuine, and reliable. This is to prevent instances such as payments being made to a contributor who is back to their work. Therefore another objective of these recommendations is to ensure quality of the information that is collected. This will ensure credibility of the agency among the public. Quality is a responsibility of the various stakeholders involved. These are; the employees, the employers, the government and all other legal personalities. Solution and Implementation Collection of information pertaining parties to a pension should be resolved by ensuring that in the process of data collection information asymmetry is addressed. This is to ensure that no party has more information than the other. Updated and relevant information should be maintained by the entity and this would be able to be achieved by a detailed process of registration process which should be updated to ensure that all parties know their roles and duties towards contribution of the systems achievement. Collection may also be affected by availability of parties for instance military personnel, these category of persons ‘ nature of activities may make it difficult to collect information as they might most times be out on duty. Planning is crucial in the whole process of data collection and updating of the same. Making a comprehensive plan enables the various players feel prepared and also feel, as they are part of the whole process. Having a plan ensures consistency and at no point does an activity with plan lacks continuity due to availability of a sense of direction. Planning also gives aspects of the criterion of quality of information expected and also gives detailed data on the stakeholders or the parties to the whole activity. Availability of data challenge should also be dealt with; this arises when the pension authority and other parties lack information. To ensure there is sufficient information, all relevant and available information should be recorded, as they could later be required or needed. This helps in the whole process since no detail is overlooked as that would jeopardize future activities in which the said details required were overlooked or deemed to be less important and hence ignored. To ensure that there is adequate data, it should be ensured that it is categorically clear that the information to be collected is necessary. This in turn would ensure those participants are aware of their requirement hence they would avail and provide data they perceive to be important as said in the guide. To ensure that there is quality data, strict adherence to the organizations quality rules and regulations should be stressed. Rules and regulations are meant to be followed and act as a guide to people involved. In the case of pension, rules on quality should be stressed so as to prevent instances of the parties being tempted to include unnecessary information or relevant information which is not in line with the expectation of the organization. This also will ensure that the information is not vague as the case with information that lacks set rules and regulations. In authorities’ pursuit to deliver on their services, quality of data should be stressed and this would be possible by ensuring; that there is consistency in the control of quality of information and also constant improvement of quality management system. Improvement entails regular validation of the available data and constant updating of their current information. To ensure existence of updated information, it therefore should be ensured that the stakeholders are enabled to update some of the required data. This is strictly part of the data to avoid including unnecessary information. Pension information is also affected by other organizations in the country. It is inevitable for organization to work in isolation; it is not any different with the pension authority. This entails that the pension payment agency works with other organizations where they give information to the agency and the reverse also takes place where the agency also provides information to the other organizations. This whole activity poses a whole new problem to the agency which is a problem of reviewing the information that they have received. In order to deal with the reviewing of information challenge, the agency should ensure that they are in an agreement with other organizations. This entails that there is a mutual understanding between the organization giving the information and the agency. When organizations have a clear understanding, the information presented from one organization to the other can be easily analyzed. The agency can therefore resolve their challenge by making agreements with expected organizations giving details on the expected information and the nature and form in which they would like to receive the information. The agency should also ensure that in order to avoid the challenge of reviewing information it should ensure a connection exist between the agency and other organizations ,connection would ensure that organizations are aware of the expected aspects for instance consistency of quality of the information the agency would receive. Connection is also important, as it would ensure that important up-dates are availed to the agency for example extension of services beyond the expected retirement age of a certain employee which is an important event in the activities of the organization. Payment is a challenge that affects the agency whereby; pension should be paid to retired employees of an organization but there are instances where some employees retire at one point, payments begin to be made and it happens that the same formally retired employees begin to work once again. This poses the challenge to the agency of whether such employees should continue being paid or what alternative actions should be taken towards such a situation which proves challenging both to the agency and the said employee and the other employing company. Having a joint registry between the agency and the retired employee would help deal with the problem of post retirement employment. The agency in this case by use of this joint registry would immediately be informed in the event the retired person was to be employed and it would assist in the agencies future actions. For example it would include reducing the amount of money the retiree would receive or temporarily stopping the payments to the retired employees until he stops working or any other action to be taken. The agency also faces the challenge of collection of contribution. Funds from employees do not easily get to the expected agency due to various factors. The agency should ensure that there is an easy flow of funds between employees and the agent, this would ensure that the employees is clearly empowered and has all the relevant information on the methods and procedures of making the payments . Knowledge of the procedures would help reduce delays which arise as a result of information asymmetry where the agency holds more information than the employee. Confidence by the agency to the employee would help improve the flow of funds from the employees to the agent. Instilling confidence to employees helps in the employees’ payment of the contribution; this is as a result of the positive feeling that comes with confidence. A course that is positively perceived by the employee moves smoothly which leads to an improved flow of funds as the employees are willing to part with their funds without feeling like there is a possibility of them not benefitting at some time in future. Reduction of errors and mistakes by the agency would improve flow of funds. There are various forms of mistakes by the agency which would negatively affect the contribution payments. These mistakes for example are dissemination of incorrect information, procedural mistakes which include mistakes in the provided methods of making contributions. Reduction of these mistakes would in turn make it easy for payment of contribution since the updates will have been communicated and not only that but also categorically stating the procedures to make such contribution to the agency. Value Created for Organization Solutions to the agency’s’ challenges if implemented would result to value creation to the agency whereby they would be able to have a smooth running of the organization. It will be easier to monitor the contributions made by the contributors. Having the necessary records of the beneficiaries in the eventuality of the death of the contributor will reduce the conflicts that would occur with many different parties claiming the compensation. Lack of such cases in such an agency increases its credibility and hence attracts more people. A link with other government sectors will ensure accountability of the tax payer’s money since no ghost transfers will be made. Allowing the contributors to update their data under their own management will ensure that the information being used is true as the contributor will be willing to make any changes as they occur since it is at their own pace and leisure. All these recommendations once implemented the public pensions agency will run in an efficient and effective way. Read More