BY NKECHI NAECHE—-In a bid to end old age poverty for all Nigerians, President Muhammadu Buhari on Thursday launched the micro pension scheme for self-employed Nigerians.
The scheme which is expected to attract over N3 trillion to the pension asset will help to deepen financial inclusion in the country.
Speaking at the launch, the president said the programme was conceived for Nigerians in the informal sector of the country.
“This initiative will capture those that are not fully captured in the existing pension scheme.
“In the past three years, we have provided loans to farmers and others in the informal sector. The micro pension plan is the next step.”
He commended the the trade associations, workers unions and non-governmental organisations (NGOs) in the informal sector to join hands with the government in enlightening their members on the importance of the scheme.
Acting Director-General, National Pension Commission (PenCom) Mrs. Aisha Dahir-Umar, said the Contributory Pension Scheme (CPS) has been very impactful in Nigeria since the commencement of its implementation in 2004, stressing that the formation of long term domestic capital, represented by the over N8.74 trillion worth of pension assets as at January 2019, belonging to 8.46 million formal sector participants, is slowly but surely changing Nigeria’s financial landscape.
She said by extension, the scheme is also transforming the course and pace of socio-economic development, as N6.51 trillion, representing 73 per cent of the total pension assets is invested in Federal Government Securities issued to finance various activities of Government.
“Thus, in the area of infrastructure alone, the pension funds invested about N95.31 billion in the N200 billion Sukuk issued by the Federal Government. Similarly, out of the N10.67 billion Green Bond issued by the Federal Government, pension funds invested N7.19 billion. Consequently, we believe that the enlistment of the informal sectorinto the pension savings net would boost the quantum of available long term investible funds that would galvanize national development efforts,” she said.
She said that the launch unveils a unique financial product, which democratizes the savings culture in Nigeria in a systematic and efficient manner, adding that the product also perfectly aligns with the current social empowerment programmes 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.
She said the scheme targets the significant majority of Nigeria’s working population who, incidentally, operate in the informal sector, stressing that participants are expected from various informal sector workers including market women, members of the National Union of Road Transport Workers (NURTW), members of Textile, Garment and Tailoring Associations, Keke Napep and Okada Riders Associations, Butchers Associations, workers in the Movie and Performing Art industry, mechanics and other workers in the automotive industry and single professionals like lawyers, accountants and many others.
“Micro Pension Plan is designed to fit the peculiarities of these informal sector groups. The National Pension Commission had extensively engaged all relevant stakeholders and obtained their inputs before the product was developed to suit their requirements.
“The product is flexible with respect to contribution amount and the channel of remittance of contributions to the respective pension accounts. Access to accumulated contributions is also flexible,seamless and facilitated by technology through varied payment system platforms.”
The PenCom boss said: “prospective Micro Pension contributor is required to open a Retirement Savings Account (RSA) by completing a physical or electronic registration form with a Pension Funds Administrator (PFA) of his/her choice.
” The contributors may make contributions daily, weekly, monthly or as may be convenient to them and that every contribution shall be split into two, comprising 40 per cent for contingent withdrawal and 60 per cent for retirement benefits.
She maintained that the contributor may, based on his/her needs, periodically withdraw the total or part of the balance of the contingent portion of his/her RSA, including all accrued investment income thereto and that the contributor may also choose to convert the contingent portion of the contributions to the retirement benefits portion. The remaining balance in the RSA shall be available to the contributor upon retirement or attaining the age of 50 years, she added.
“Pursuant to its regulatory and supervisory mandate, the Commission had established a separate Department dedicated to the supervision of all matters relating to Micro Pension Plan, including enforcement of compliance with the Guidelines and customer complaint handling and resolution. Our objective is to ensure efficiency and effectiveness in service delivery as well as transparency and accountability in the administration of the product by licensed pension operators,” she said.
She noted that with the formal launch and subsequent successful implementation, the Micro Pension Plan is expected to significantly expand pension coverage to greater number of Nigerians and further generate additional long term funds for Nigeria’s economic development.
She assured that the commission would collaborate with relevant stakeholders to sensitize and enlighten the target participants and members of the public on the features and benefits of the Micro Pension Plan.
Buhari at the launched of the programme at the State House Conference Centre, Abuja, supervised the registration of a Keke NAPEP operator, Sagir Shawai, a resident of Karu village of the Federal Capital Territory.
