Uche Usim, Abuja
Barring any change in programmes, the National Pension Commission (PenCom) will, before the end of the month, launch a Micro Pension Plan, which is expected to attract N3 trillion into the existing N8.45 trillion pension assets.
A top government source who disclosed this to our correspondent also revealed that the programme targets to attract over 20 million workers, a development he said was consistent with Federal government’s blueprint on job creation.
He said: “PenCom as the industry regulator, has put necessary machinery in place to ensure smooth launch and take off of the plan.
“To ensure seamless operations, PenCom, together with pension fund operators, has built robust Information Technology (IT) infrastructure that will support the plan.
“The commission has also had engagements with informal-sector groups, such as, the Nigerian Union of Textile, Garment and Tailoring Workers of Nigerian (NUTGTWN), a body consisting self-employed tailors and garment workers; partner trade associations, Non Governmental Organisation (NGOs) and religious bodies in a bid to persuade them to subscribe to the micro- pension plan,” he explained.
Currently, total pension assets of Nigeria, as at October 2018 stands at N8.45 trillion, and with the new initiative, it is expected to grow exponentially when it eventually becomes operational.
However, the Head, Corporate Communications, PenCom, Mr. Peter Aghahowa, described the micro-pension initiative as very flexible plan designed to make it very easy for people to join, while the method of contribution is decided by the contributors, who are to choose whether to contribute daily, weekly, monthly, quarterly, and so on.
He added that the minimum age of eligible participants is 16 years, pointing out that PenCom as the regulator, was working closely with other operators on the IT infrastructure to ensure smooth operations of the initiative.
However, the acting Director-General, PenCom, Mrs. Aisha Dahir-Umar, has described the planned initiative as a springboard to higher-living standard of Nigerians within the informal sector bracket when they retire.
She added that it would also reduce their dependence on their extended family members for support at retirement.
She further noted that the plan would capture self-employed people, especially, those with irregular income, usually in the informal sector and are largely financially uninformed or with limited or no access to financial services, especially, a pension plan.
Section 2(3) of the Pension Reform Act, 2014 legal framework extends the coverage of the Contributory Pension Scheme (CPS) to self-employed persons through micro-pension scheme.
The Head, Research & Corporate Strategy, PenCom, Dr. Farouk Aminu, had, at a recent forum said, the commission was working on ensuring that the plan commenced as planned, describing it as one that would enhance the growth of pension assets in the country.
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He stressed that the plan has the potential to generate about N3 trillion to the pension assets, while it intends to mobilise about 12 million contributors within five years.
On benefits to be derived, Aminu, noted that self-employed people and workers in the informal sector could reap by participating in the plan, saying that the initiative, in addition to providing income for people at old age and inculcating a savings culture through highly protected and regulated investment, would afford them the opportunity to connect to other programmes of government while helping to finance infrastructure across the country.
Subscribers could, as well, use the balance in their Retirement Savings Accounts (RSAs) as equity contribution for residential mortgages and support their businesses, he said.
He stated that additional benefits to self-employed persons and informal sector workers include the cover provided under the Pension Protection Fund (PPF), explaining that under this arrangement, government would bridge shortfalls or financial losses from investment of their accumulated retirement savings and guarantee them minimum pension in retirement, irrespective of how much they are able to save before retiring.
He posited that the plan would be funded by an annual subvention of one per cent of monthly wage of Federal government employees, annual levy on PenCom and pension operators as well as pension fund investment income.