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Overcome old age poverty, enroll in Micro Pension Plan, PenCom urges artisans, traders

From Geoffrey Anyanwu, Enugu

National Pension Commission (PenCom) has urged artisans, traders, and other self-employed people in the country to overcome the risk of old age poverty by enrolling in the Micro Pension Plan of the Commission.

The Head, Corporate Communications of PenCom, Abdulqadir Dahiru, who gave the advice said it will guarantee a functional retirement plan the people can hold-on to.

Dahiru, who spoke in Enugu on Thursday at the ongoing 34th Enugu International Trade Fare stressed the importance of the Micro Pension Plan to Nigerians in the informal sector and those working in organizations with less than three employees.

Noting that about 90 per cent of workers in Nigeria are in the informal sector, Dahiru said that this category of workers have no pension protection for old age and with the increase in people living long, “there is a risk of old age poverty”.

Explaining further, he said the Micro Pension Plan platform provides workers in this sector the opportunity to easily register and contribute in a flexible manner and in a safe and secure environment for their pension at retirement.

According to him, “The Micro Pension Plan is a flexible plan, where the artisans, traders and even a woman that sells fried beans cake (akara), can register with and agree a periodic amount she/he would be contributing according to her/his earnings.

“The contributors, within this flexible Micro Pension Plan for all Nigerians in the informal sector, can even draw out 40 per cent of what they have saved for emergency demand; while the remaining 60 per cent would remain and await for the retirement plan proper.

“So, it is a means of savings also for those in the informal sector and where they could fall back to and get financial assistance to keep their daily engagements going.”

Dahiru while expressing PenCom’s desire to ensure Nigerians in the informal sector enroll and register in the plan, disclosed that it had started sensitisation of the plan to communities, market places, public gatherings, associations and trade fair grounds across the country.

He also urged Nigerians to embrace PenCom acquisition of residential mortgages (residential houses) scheme for Retirement Savings Account (RSA) holders.

The PenCom spokesman recalled that the Central Bank of Nigeria (CBN) had approved no less than 34 mortgage banks to work with the PenCom and Pension Fund Operators in providing mortgage financing to Contributors into the Contributory Pension Scheme (CPS) with their RSA balance.

The Commission, he stressed was determined to implement the scheme for the contributors to ensure that RSA holders have houses of their own at retirement.

Dahiru noted that for contributors under the Contributory Pension Scheme (CPS) to be eligible to use their RSA balance for acquisition of residential mortgages, they must have contributed for five years (60 months) cumulative of employer and employee’s mandatory contributions.

He said, “The same thing applies to the contributors under the Micro Pension Plan; even married couples, who individually met the eligibility criteria, were also eligible.”

Explaining the limit for equity contribution that qualifies a contributor, he said that the maximum allowed at 25 per cent of the RSA balance, adding that where 25 per cent of RSA balance is more than equity contribution, the RSA holder can only access the amount equivalent to equity contribution required.

He said, “Where 25 per cent was not sufficient for equity contribution, RSA holders may utilise Voluntary Contribution (VC) in line with the Voluntary Contribution guidelines.”

He said that it is hoped that the mortgage financing incentive would help to grow the number of contributors into the CPS scheme.

The Commission is at the ongoing Enugu International Trade Fair ground to promote her new plan product, give clarification to questions on pension and make its presence felt among others.

 

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