Nigerian pension fund operators say they have commenced registration of enrollees under the micro pension scheme after its formal launch by President Mohammadu Buhari a few weeks ago.
They said though the enrolled number is still insignificant as a result of the teething challenges of data capturing, which they are working together with the National Pension Commission (PenCom), the industry regulator to address.
We have started selling, some people have been enrolled, but as result of operational challenges, it is still insignificant, members of the Pension Fund Operators Association of Nigeria (PenOp), said during an interaction with journalist.
The PenOp members led by their president, Ronke Adedeji said “we are learning from our experience with CPS in the formal sector in terms of data capturing and registration.”
Adedji said the expected uptake and enrolment will come as soon as the operational challenges are addressed, stating that PFAs will hit the market for subscribers as soon as the initial challenges are addressed.
The PenOp members noted that, to reach the informal sector target, a combination of strategies will be deployed including direct marketing by staff of PFAs, through the agents and also through electronic platforms.
Adedeji joined by other executive members of PenOp said the industry is excited about unbundling the micro pension plan to carter for a larger population of Nigerians, who hitherto has got no form of savings for old age.
“Pension is a necessity in every nation because any nation that cannot take care of its citizens at old age will definitely run into crises. So, we see this as significant step towards reducing old age poverty among the citizens”.
The next growth phase in the nations Contributory Pension scheme (CPS), is hinged on bringing on board over 60 -70 percent of the informal sector population, and this is key to industry plans and strategies. Operators, including Pension Fund Administrators (PFAs) and Pension Fund Custodians (PFCs) are very enthusiastic and eagerly waiting to harness the potential.
At the moment, operators are initiating strategies and programmes to court this population of the uncovered Nigerian workforce whose economic activities can best be described as huge but largely un-captured.
Interaction with key players in the industry suggests that a lot can be achieved if this scheme is unbundled. “We are optimistic about the new growth phase in the industry as the informal sector will catapult the CPS to its next level, an operator said.
The micro pension plan, which is an initiative of the PenCom is aimed at the provision of pension services to self-employed persons in the informal sector and employees of organisations with less than three staff.
The informal sector constitutes an estimated 69 million work force in the country and represents an estimated 88 per cent of Nigerian workers that lack pensions and safety nets for their old age.
The goal of the commission is to achieve coverage of 30 million people in the informal sector by 2024.
Aisha Dahir-Umar, acting director-general of PenCom said during the official launch in Abuja that this is the first time such window of opportunity is being opened to self-employed Nigerians and those working in the informal sector, to participate and enjoy the benefits inherent in the Contributory Pension Scheme.
She said the launch is remarkable because it unveils a unique financial product, which democratizes the savings culture in Nigeria in a systematic and efficient manner.
“The product also perfectly aligns with the current social empowerment prgrammes of the Federal Government as it seeks to ensure, in the long term, the sustainability of the benefits of the empowerment programmes for the participants, who may seize this opportunity to save for their old age.”
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