Pension

PenCom, PenOp Unveils Strategies To Drive Micro Pension * Says We Are Ready For Business

BY NKECHI NAECHE—-Following the successful implementation of contributiory Pension Scheme (CPS) in the formal sector of the economy, National Pension Commission (PenCom) and pension operators said its fully ready to tap into the the opportunities provided by the CPS  in the informal sector through micro pension scheme.

The PenCom had recently announced that the Federal Government has approved the Micro pension guidelines that will guide the operators in its implementation

Speaking at the 2018 Pension Fund Operators Association of Nigeria (PenOp), held in Lagos recently, the Managing Director of ARM Pension Managers, Mr.  Wale Odutola, who spoke on behalf of the operators said they are ready to commence business when it finally takes off in January 2019.

According to him all modalities have been put in place by the commission and the association to make sure the industry bring all working Nigerians into the scheme and the same time grow the pension assets above the N8.23trillion.

He added that the operators before now had to set up two committees to review the guidelines and come  out with plans how the industry can harness the potentials of the micro pension scheme.

Poised to ensure that all Nigerians are in the scheme he said the operators plans to deploy the service of agents, technology etc to drive the micro pension plan.

He noted that distribution channels has been identified as one of the major tools that can help to deepen Micro pension in the informal sector.

He added that expanding the channels of distribution will go a long way in bridging the gap of pension awareness and penetration in the country.

Speaking further, Peter Aghahowa, Head Corporate Communications PenCom, said the commission , is developing the required ICT infrastructure to drive the process as this is critical to the success of implementing the Micro Pension Plan.

On capital inadequacy, he said  “there is no need for capital adequacy requirement for Pension Fund Administrators (PFAs) as happens in the banking and insurance sectors given that PFAs offer mainly administrative and investment services to contributors.”

He noted that the current capital status of PFAs is adequate for the micro pension scheme.

With about 50 million potential pension contributors residing in the informal sector yet to be captured in the new pension scheme, the micro pension scheme is aimed at persuading these people into the pension system, thereby mobilising about N3 trillion from this informal sector into the N8.23 trillion pension assets.

The CPS, within 14 years, grew the pension assets from a deficit of almost N2 trillion in 2004 to a robust contributors’ fund of N8.23 trillion as at the end of June, 2018, a feat achieved through proper implementation of regulatory policies and initiatives.

As at June 30, 2018, a total of 8.14 million contributors made up of 43.67 percent in the public sector and 56.33 percent in the private sector.

 

 

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