Micro Pensions scheme to boost pension contribution across Nigeria

The National Pension Commission (PenCom) has reported that as at September, 2016, the pension coverage in Nigeria stood at 7.24million under the Contributory Pension Scheme (CPS) representing only about 7.7 percent of the Nigerian Labour Force.

While the formal sector had been catered to under the CPS, PenCom had realized that the informal sector was largely excluded from access to Pensions.

In order to protect the financial future of this segment, a Micropension scheme was launched specifically targeted at self-employed people, especially those with irregular income, usually in the informal sector and who are largely financially uninformed and have limited or no access to financial services especially a pension plan.

At a recent pension, insurance and finance workshop which held in Calabar, the head of the Micro pensions Department of PenCom, Polycarp Anyawu stated that the micro pension scheme was expected to help boost the pension contributors to 20 million Nigerians by 2019 and 30 million by the year 2024.

Anyawu also stated that the Micro Pension scheme would directly address issues to avert old age poverty and the breakdown of family support. Just like in other jurisdictions, it is expected that the initiative will provide pension coverage to self-employed persons and cover the Lowest, Middle and High income earners in the country.

As an offshoot of the pension industry 5-year strategic plan to extend pension converge, the micro pension scheme will have simplified registration process through physical presence, internet, or through mobile phone.

In order to ensure its success, the National Pension Commission was also collaborating with Chambers of Commerce and other government agencies like the CBN, SMEDAN, etc and reviewing the implementation of Micro Pension in other jurisdictions e.g. Kenya and Ghana.

Despite prevailing economic headwinds which drove unemployment rate higher (to 13.8 percent in Q3 16) and delayed payments of RSA contributions to appropriate PFAs at the Federal and State levels, total pensions asset rose 17 percent YoY (2015: +11% YoY) to N6 trillion as at September 2016.

PATRICK ATUANYA