Experts have expressed optimism that the Micro Pension Plan (MPP) launched yesterday by President Muhammadu Buhari would advance Nigeria’s financial inclusion, reduce old-age poverty and lessen old-age dependency.
In line with the provision of Section 2 (3) of the Pension Reform Act 2014, the National Pension Commission (PenCom) designed a flexible pension plan to capture informal sector workers who were not fully captured in the mandatory contributory pension for the formal sector.
At the launch, President Buhari observed that “millions of traders, farmers and other entrepreneurs in various cottage industries are completely excluded from the different pension programmes in existence.”
The President described the MPP as a pension product that would ensure that informal sector workers would “live in dignity and comfort” at retirement.
He encouraged Trade Associations, Unions, Non- Governmental Organizations and other stakeholders in the informal sector of the economy to to key into the plan.
The Acting Director General of PenCom, Aisha Umar-Dahir, projected that the micro pension plan would reduce old-age dependency through the reduction of old-age poverty by 85 per cent.
Micro Pension Plan targets the significant majority of Nigeria’s working population operating in the informal sector such as market women, road transport workers, farmers, tailors, ‘Keke Napep’ drivers, ‘Okada riders’ and petty traders in general.
Umar Dahir said the plan would also cover members of 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.
“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,” she said.
The President of the Pension Fund Operators Association of Nigeria (PenOp), Mrs Aderonke Adedeji, said the kick off of the micro plan
Mrs Adedeji said when the contributory pension scheme (CPS) started, it was essentially for the organised private sector and public sector. The PenOp President said the micro pension plan is a plan for providing long-term financial security for all Nigerians.
She said Pension Fund Administrators (PFAs) would work with PenCom to enlighten Nigerians on the its benefits.
Speaking of the technology to drive the implementation, she said PFAs had upgraded their technologies to ensure seamless and simple registration, contribution and withdrawals.
The General Secretary of National Union of Textile, Garment and Tailoring Workers of Nigeria, Issa Aremu, said workers in the informal sector of the economy are excited about the birth of the micro pension plan in the country.
Aremu, who is also a member of the National Executive Council of the Nigeria Labour Congress (NLC), said he could bear witness that workers’ pensions are secured in the organised private and public sector and now is the time to replicate same in the informal sector.
He said there was a need for the government to set up a Micro Pension Fund, which would be used to augment the meagre contributions of the workers in the informal sector to serve as an incentive to drive members.
Aremu said the Fund would ensure minimum pension for the informal sector workers, who pay taxes, to give them comfortable lives in retirement.
He said when fully implemented, the micro pension plan have the capacity to raise contributory pension scheme membership to about 80 million people as the informal sector has about 75 million people.
