Pension regulator mulls incentive to attract informal sector workers

For the National Pension Commission (PenCom), success of the Contributory Pension Scheme (CPS) which commenced 10-years ago have gone beyond value of pension assets, but more on the number of Nigerians protected under the scheme.

This singular vision is what is driving the Commission’s quest for increased penetration of the scheme across the states and local governments as well as its micro pension scheme being designed to open up the informal sector market.

Chenlo Anohu-Amazu, director general, National Pension Commission said the Commission is more than ever determined to ensure that larger population of Nigerians particularly in the informal sector take advantage of the CPS to protect themselves and their dependants particularly in retirement.

Anohu-Amazu, who spoke at a Stakeholders’ Sensitization Conference on Pension Reform Act 2014 for the North-West Zone held in Kaduna organised by PenCom said “With enhanced provisions of the PRA 2014, the Commission is intensifying efforts at extending coverage of the CPS to the underserved economic segments such as the informal Sector, through the Micro Pensions Initiatives.”

“We are working at providing necessary incentives with requisite flexibility in terms of access, as to encourage informal sector works to embrace the Micro Pensions for future economic security.”

She observed that many States in the Federation have adopted the CPS and are at various stages of its implementation.

The PRA 2014 gives additional impetus for participation in the CPS by explicitly prescribing the coverage of States and Local Government employees, in addition to the Federal Public service and private sector.

According to her, the scorecard for the North-West Zone is somewhat encouraging. “Three States in the Zone, including our host Kaduna, have commenced implementation of the CPS.

However, there are some implementation milestones that should be attained by respective States. I would therefore like to fervently appeal to all the States and Local Governments in the North-West Zone that are yet to adopt or implement the CPS to immediately comply in order to avail their employees of the numerous benefits of the Scheme, while avoiding huge future pension liabilities.”

Anohu-Amazu further noted that the need for more efficiency in managing finances has never been greater than now, given the lean available public resources, stating that the adoption of CPS by States is one effective tool of managing finances by paying monthly pension contributions into employees’ RSAs as opposed to settling these huge liabilities at the point of retirement, being the case in the Defined Benefit Scheme.

“In our quest to assist the States in guided implementation, PenCom has established functional offices in the six geo-political zones including Kano for the North-West Zone. These offices have been equipped to provide the required technical assistance to States and Local Governments in their efforts to adopt and implement the CPS.”

Furthermore, the Commission had recently made a presentation to the National Economic Council (NEC) where we highlighted the numerous benefits that States would be availed under the CPS, she said.

The North-West Zone Conference in Kaduna is the fifth in the series of conferences, scheduled for the six geo-political zones of the Nigeria. The previous four editions of the conference were successfully held in Lagos, Abuja, Enugu and Uyo. Following the enactment of the PRA 2014, the Commission decided to embark on an intensive enlightenment campaign as a platform to educate the public on its new provisions.

This Conference was also predicated on the need for ongoing public awareness initiatives about the CPS, in recognition of the inadequate understanding about its lofty features as a reliable pension system.

The Theme of the Conference ‘The Pension Reform Act, 2014 – Innovations and Improvements to Nigeria’s Pension Sector’, according to the Commission encapsulates in a nutshell that the implementation of the CPS in Nigeria has achieved a worthy paradigm shift in pensions for the benefit of Nigerian workers.

Modestus Anaesoronye