• Saturday, July 20, 2024
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Deepening micro pension major focus of players, regulator in 2022

Micro pension to leverage new initiatives for growth

A strategic effort to take micro pensions to target consumers will be the major focus of industry operators and regulator in the year 2022.

While arrangements to re-launch the campaign is being packaged together through a joint committee of the regulator and operators, attempts have been made to reach out to major markets in Lagos as take off point.

As at the last count only about 72 Nigeria’s in the informal sector have keyed into the micro pension scheme since its launch in 2019.

Dowda Ahmed, head, Micro Pension Department in PenCom only 72,000 participants have been registered under the Micro Pension Plan (MPP) as at November, as not much has happened as result of Covid-19, which affected the economy and targeted enrolees in most of the 2020 to date.

Ahmed made the disclosure during the annual media retreat of the insurance and pension journalist organised by the Pension Fund Operators Association of Nigeria (PenOp) in Lagos with the theme: “Micro Pension – Challenges and Opportunities.”

Ahmed explained that the micro pension scheme is designed for the informal sector, such as the self-employed or organisations which could not participate in the Contributory Pension Scheme (CPS) because they do not have a minimum of three employees as specified by the Contributory Pension Scheme (CPS) Act of 2014.

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“These include small-scale business owners, petty traders, artisans, and entrepreneurs, among others,” he said.

According to him, micro pensions was put in place to curb old-age poverty by assisting people to contribute while working and have long-term savings they could fall back on when they become old.

The PenCom official stated that the scheme is designed to be voluntary as against the CPS, which is mandatory.

Ahmed said that the scheme is flexible because the contributor determines the amount to be contributed and the frequency of contribution.

He noted, however, that the commission has strict regulation and monitoring of the micro-pension scheme.

Ahmed said: “MPP is based on individual and personalised Retirement Savings Account (RSA), as only the RSA holders have access to the balance in the account.

“There is separation of management and custody of the pension funds which ensures that Pension Fund Administrators (PFAs) who manage the fund, do not have direct access to them as the funds are kept by the Pension Funds Custodians (PFCs).

He called for an aggressive media campaign to create more awareness and educate Nigerians on the benefits of the scheme.