The National Pension Commission (PenCom) is poised to drive the Micro Pension Plan (MPP) with healthcare incentives and operational flexibility that makes it attractive to informal sector workers and other self-employed professionals.
PenCom said this has become necessary to make sure that many people in the informal sector as well as professionals in organisations having less than three employees take advantage of the window to save for their old age.
Omolola Oloworaran, acting director-general, PenCom gave the hint during the Special Day event of the National Pension Commission at the side-line of the Lagos International Trade Fair at the Tafawa Balewa Square, held in Lagos.
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The event was a public sensitisation on the inclusion of the informal workers and the self-employed under the Contributory Pension Scheme (CPS) through the Micro Pension Plan.
Akinsola Adeseun, zonal head, PenCom, Southwest Zonal office, who represented the Ag. director general said PenCom is in charge of regulation and supervision of pension industry in Nigeria, ensuring that retirees get their pensions as at when due.
Babatunde Alayande, head of Micro Pension Department at PenCom speaking explained that Micro Pension Plan is not just for the informal sector, but also for self-employed professionals such as the accountant, lawyers, town-planners, engineers working in for themselves or in organisations that are less than three employees.
He said PenCom will intensify its awareness and sensitization programmes on micropension.
According to him, “Part of what the commission is looking at is create awareness by letting people know that micro pension is not just for informal sector workers alone, but for processionals.
“The commission is working assiduously to make sure that there are incentives for people participating in this micro pension plan, especially, incentives for the informal sector.
“Part of the focus of the commission in this respect is the need to incentivise the informal sector participants with basic health insurance plans to encourage them, so they do not just bring money and save, but have other benefits.
“The commission has ensured that contribution into Micro Pension Plan is flexible in the sense that you can contribute daily, weekly, monthly or quarterly, depending on the type of work you are doing.”
He explained that the RSA contribution of the micro pension participant is split into two, comprising of the contingency and pension parts.
According to him, “If you contribute any money, the money in your RSA will be split into two; 40 per cent will go into contingency, 60 per cent for pension.
“The 40 per cent was done that way because an average informal sector participant will need money occasionally, so the 40 per cent contingency portion can be used by an informal sector worker to settle their needs as they arise.”
Adeseun, while assuring of confidence in the Contributory Pension Scheme (CPS), he said retirees are paid as at when due because the scheme is fully funded.
According to him, “The employer and employee both contribute to the scheme. The employer contributes 10 per cent, while the employee contributes a minimum 8 per cent, making 18 per cent all together, and this goes into the Retirement Savings Accounts (RSA) of the workers so that when they are retiring, the money is already invested, and it is ready for them to be taken out as their pensions at retirement.
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Ibrahim Garba Buwai, head of Corporate Communications, PenCom, said, micro pension is about financial inclusion, providing a platform for savings so that workers can have something to fall back onto, especially in the time when they are no longer active.
He said, “The micropension takes care of the peculiarity of this particular sector in the sense that we know that they have ongoing needs. The 40 per cent of their RSA is for contingency, meaning if you have needs, emergency, to pay medical bills, children school fees, and you can withdraw from the RSA, while the remaining is set aside for the purposes of pensions.
Gabriel Idahosa, president, Lagos Chamber Of Commerce and Industry in his welcome remarks at the event said Nigeria’s pension landscape has seen significant improvements due to reforms and technological advancements.
He said that going into the future, the industry must expand public awareness about pension benefits, particularly among informal sector workers, stating that campaigns in local languages, leveraging digital platforms, can help reach more Nigerians, especially in rural areas.
According to him, to provide long-term fund values, PFAs should have more flexibility to invest in stable, high-yield assets like infrastructure bonds and REITs, as such investments can also benefit national development projects.
Idahosa charged PenCom to consider having more engagements with representatives of the private sector to boost coverage and trust in the scheme.
“Prompt payment of benefits to retirees will deepen confidence in the scheme nationwide, he said.
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