• Wednesday, December 06, 2023
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Pension sector tasked on innovation, products to drive micro pension

Nigerians tap N208bn pension savings as job crisis worsens

Players in the pension sector have been urged to bring in innovation and come up with products that will make informal sector workers find the micro pension plan attractive.

Experts who spoke glowingly on the prospect of the scheme to enhancing sector’s penetration and contribution to the country’s GDP shared their thoughts at the Maiden ‘Micro Pension Open Day’, organised by the Pension Operators Association of Nigeria (PenOp) in Lagos.

Paul Oluikpe, head, Financial Inclusion Department of the Central Bank of Nigeria (CBN) said bringing more Nigerians especially those in the informal sector into the micro pension basket represents a sure way of including more Nigerians into the financial systems in view of the multiplier effects of the scheme.

Oluikpe who sent goodwill message from Abuja noted that it was for good reasons that CBN has adopted pension sector as a critical arm of its financial inclusion drive.

“An average Nigerian must have one form of pension scheme or the order; formal or informal. Micropension has been helping us to include more Nigerians in the financial safety net. The seven per cent penetration level of pension in Nigeria as opposed to the 40 per cent projection is an indication of the huge potentials in the sector and this must be harnessed. Micro pension can be made a big deal in Nigeria”, he said.

Oluikpe therefore challenged pension fund operators to be more creative in the area of product designs by introducing products which holds multiple benefits as to serve as an anchor in attracting more into embracing the scheme.

According to him, the era of one-size fits all in consumer engagement is gone thus making room for operators to be more ingenious in their product designs.

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“We have to sufficiently target specific segment of the society with varying needs meaning that operators must remain innovative and creative with service and products. We need to rethink our old ways”, he insisted.
Dauda Ahmed, head, Micro Pensions at the National Pension Commission said efforts are being made to institutionalize some incentives which will help in attracting more of the informal sector to embrace the micro pension, which will ensure that those in the informal sector have pension arrangements which will cater for their old age at retirement.

According to him, efforts of the pension fund operators are beginning to yield results as more of the artisans are now subscribing to the micro pension programme, informing that a total of 95,450 people have registered in the micro pension as at the end of April this year with a total managed assets of N435.6 trillion.

He said, as part of incentives to embracing micro pension, PenCom was working toward adopting a minimum health insurance for eligible MPP participants.

Ahmed stated that the commission was also engaging with labour unions, trade associations and several groups on embracing the plan.

Ahmed listed the challenges to the implementation of the plan to include; lack of awareness, mistrust about the pension system, absence of appropriate incentives and lack of financial literacy.

Earlier, Oguche Agudah, chief executive officer (CEO), PenOp charged the informal sector workers to visualise how their needs would be met in the next 20 to 30 years without a pension plan.

Agudah noted the PFAs were concerned about improving the mirco pension penetration in Nigeria, saying, “the country has the largest informal sectors who are not covered by any form of formal pension”.

“We, in the pension industry are working together to get as many informal sector workers as possible on a pension scheme.