•Experts urge PenCom, PFAs to boost enrollment
By Henry Uche
A growing number of informal sector workers are embracing the Micro Pension Plan (MPP), with 164,031 enrollees collectively saving N967.19 million as at the third quarter of 2024.
The National Pension Commission (PenCom) disclosed this in its recent report titled, ‘Pension industry dashboard,’ obtained over the weekend.
Launched in 2019 to provide retirement savings for informal sector workers, the MPP programme has steadily gained traction.
This was made possible through awareness creation and enlightenment campaigns even in the hinterlands.
But despite this progress, experts PenCom and Pension Fund Administrators (PFAs) to ramp up awareness and enrollment efforts to ensure broader financial security for workers in the sector.
Latest figures from PenCom reveal that as of Q3 2024, 164,031 people had registered under the MPP.
Notably, 12,241 of these workers have funded Retirement Savings Accounts (RSAs), with 5,971 new funded registrations from 2020 through Q3 2024. The total savings in these RSAs now stand at N967,194,762.23, reflecting a significant growth of over N878 million from N89.13 million recorded in 2020.
Meanwhile, an interview with some micro and small business operators in the informal sector in some selected places across Lagos and other states revealed that some petty business operators are fully aware of Micro Pension Plan (MPP), since its launch, however; not many of them have embrace the scheme as a sustainable future financial security for themselves, while some of them are totally ignorant of the Pension Plan.
Mrs. Issabela Tojo, a provisions store retailer in Lagos, said she appreciates the initiative targeted at informal sector workers, but their biggest challenge has been the harsh economy, which has drastically eroded their income. This, she explained, makes them prioritize daily survival over saving for the future. Moreover, the fear of the unknown, as she puts it, is another major concern.
“I have heard about the Micro Pension Plan for the past three years. I know some of my market colleagues have embraced it, and they have been telling me to approach a Pension Fund Administrator to register. Some even registered online using their phones. However, we still need to visit their offices for data capture and a better understanding of the scheme because most of us don’t have smartphones.
“Moreover, our businesses have not been doing well in the last eight years, even before the scheme was introduced in 2019. You are here, and you can see the suffering we have endured in this country—it has been terrible! Before we even talk about school fees, rent, or clothing, we need to eat first to survive. If you don’t have physical strength, how can you go out to work? In fact, this is why most Nigerians shy away from picking up insurance coverage—not because we don’t understand its relevance, but because the economic hardship is unbearable, and you have to pay premiums,” Mrs. Tojo lamented.
On his part, Mr. Tejiri, a frozen foodstuff dealer in Osogbo, admitted to being unaware of the scheme. According to him, PenCom and Pension Fund Administrators still have a lot of work to do in incorporating more low-income earners from the informal sector. He noted that he has always been a diligent and prudent businessman, and his savings culture has helped him over the years. However, he recently learned to make his savings more productive by diversifying his income streams, choosing to invest in other businesses rather than keeping his meager earnings in an account with no interest.
He said, “We need to know more about this Micro Pension Plan because many of us in rural areas don’t know much about it. I believe it’s the same situation in other states, especially in the North. We need better understanding and easier access to the Pension Fund Administrators’ offices. Many businessmen and women are not educated at all, so this concept would sound strange to them. But there is always a way to make people understand—every problem has a solution,” he stressed.
Speaking with an investment expert, Mr. Charles Orji, he stated that given the current level of Micro Pension Plan (MPP) penetration in the country—coupled with high illiteracy rates among the target market, limited access to PFAs, lack of information, and the absence of digital tools—the regulator and operators need to intensify awareness campaigns and improve access for people in remote areas.
“Though insecurity poses a challenge to business expansion in some parts of Nigeria, there are ways to navigate this issue if they think strategically. Everyone deserves a secure future, no matter the sector they operate in,” he maintained.