As part of the initiatives to bring all working Nigerians into the financial inclusion net, President Muhammadu Buhari will on Thursday launch the Micro Pension Plan (MPP) in Abuja.
The MPP which is an initiative of the National Pension Commission (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 workforce in the country and represents an estimated 88 percent 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.
The formal launch is the official flag-off of the plan and attests to the objective of the current administration to provide ample opportunities for financial inclusion and economic stability for more Nigerians in the informal sector.
This initiative gives the self-employed professionals, entertainers, lawyers, doctors, entrepreneurs, artisans, casual workers, among others opportunity to save for pension, according to a statement from PenCom signed by its general manager, corporate communications.
The launch signifies the commencement of activities that will culminate in the full implementation of the MPP. Accordingly, the National Pension Commission and the pension operators will continue the education and sensitisation of the public through robust campaigns across traditional, social and digital media while registration of contributors will follow in subsequent months.
The statement said PenCom remained committed to good corporate governance and high ethical standards that will ensure the success of the Micro Pension Plan.
Contributors to the plan must be above 18 years old with defined sources of income, resident in Nigeria, self-employed persons that belong to a trade, profession, cooperative or business association, according to PenCom guidelines seen by BusinessDay.
Others who are eligible as contributors are self-employed persons with a business registration as a company, partnership or enterprise, employees operating in the informal sector who work with or without formal written employment contracts, and other self-employed individuals.
“Micro Pension Plan refers to an arrangement for the provision of pensions to the self-employed and persons operating in the informal sector. For the purpose of these Guidelines, the informal sector refers to employees in business entities, organisations and/or persons that are not mandated to implement the Contributory Pension Scheme as provided in Section 2(1) of the Pension Reform Act, 2014. Self-employed individual earns his/her income through conducting trade or business for him/herself. Micro Pension Contributor (MPC) is a person who is registered under Micro Pension Plan,” PenCom said in the guidelines.
According to the guidelines, a prospective Micro Pension Contributor shall be required to open a Retirement Savings Account (RSA) by completing a registration form with a Pension Fund Administrator (PFA) of his/her choice.
The PFA will assign the appropriate Nature of Business (NOB) codes for the prospective micro pension contributor as provided by the Commission.
The guidelines stipulate that electronic registration should be made available by all PFAs, and they shall electronically capture the applicant’s 10 fingerprints and must pass the Automated Fingerprint Identification System (AFIS) quality requirements specified in the guidelines for the registration of contributors/members issued by the PenCom.
“Where the quality of the 10 fingerprints does not meet the required AFIS specification due to physical impairment, the PFA shall treat such prospective micro pension contributor as physically/partially challenged and shall register such in line with the guidelines for registration of contributors/members issued by the Commission,” PenCom said in the guidelines.
The registration information shall be transmitted to the Commission electronically by the PFA to enable PIN generation. The PIN generated by the Commission shall be forwarded to the PFA immediately. The PFA shall forward the PIN to the Micro Pension Contributor. Registration shall also cover the “Customer Familiarity Index” (CFI) on Micro Pension Contributor.
Would-be micro pension contributors are to provide any of the following valid means of identification at the point of registration: National Identification Number, permanent voter card, driver’s licence or international passport.
Any of the following documentation shall be provided at the point of registration: evidence of membership of a registered association, union or cooperative society, certificate of business registration, certificate of incorporation, and letter of employment or Bank Verification Number (BVN) or other documentation as may be specified by the PFA.
A micro pension contributor may transfer his/her Retirement Savings Account from one PFA to another in line with the regulations for the transfer of RSA issued by the Commission, while contributions shall be made in Nigerian currency (Naira). Contributors may make contributions daily, weekly, monthly or as may be convenient to them provided that contributions will be made in any given year.
The guidelines stated that every contribution shall be split into two comprising 40 percent for contingent withdrawal and 60 percent for retirement benefits. The amount of contribution shall be dependent on the micro pension contributor’s pension aspiration and financial capacity.
A most significant aspect of the guidelines is a section requiring both PFAs and PFCs to inform the Economic and Financial Crimes Commission of any single lodgment of N5 million and above.
Contributions shall be made by cash deposit, electronically, through any payment instrument/platform or other financial service agents approved by the Central Bank of Nigeria. The PFC shall immediately advise the PFA upon receipt of value of contributions. Upon receipt of notification from the PFC, the PFA shall immediately notify the micro pension contributor.
John Osadolor
