By Eromosele Abiodun
In a bid to enable informal sector employees participate in the contributory pension scheme (CPS), the National Pension Commission (PenCom) has introduced the Micro Pension Scheme for artisans, traders, tailors, farmers and other categories of self-employed persons.
The Director-General of PenCom, Chinelo Anohu- Amazu, who stated this during the Commission’s special day at the 11th Abuja International Trade Fair in Abuja, informed that the scheme will allow such category of persons open retirement savings accounts with any pension administrator of their choice to contribute towards the provision of pension in their old age adding that the scheme would be launched soon.
The director-general, who was represented by the Commission’s Company Secretary/ Legal Adviser, Mr. Mohammed Sani Mohammed, listed the benefits of the scheme to include flexible contributions and easy withdrawals and investment income on contributions among others. The contributors are assured of the safety of the funds because the Commission will not relent in its efforts to protect the rights of contributors and retirees.
THISDAY gathered that PenCom’s decision was in order to increase the pensionable population in the country.
Also, there are indications that the commission is planning to introduce incentives such as access to loans for artisans and others in the informal sector so that they can voluntarily buy into the scheme, the operators have said.
Since the inception of the CPS in 2004, only the formal sector has been allowed to have Retirement Savings Account, but they are not allowed to access the funds at will.
The commission, THISDAY learnt is planning to introduce some incentives to woo the informal sector into the scheme through a guideline that it is presently working on.
The guideline will give the informal sector access to their funds because the CPS is not going to be made mandatory for them, according to PenCom.
Operators said the guideline would consider the fact that a lot of them were poor and not under any employer and might need access to their money at any time.
PenCom stated that the Pension Reform Act 2014 expanded coverage of the CPS to the self-employed and persons working in organisations with less than three employees.
“As this category of workers constitutes the larger percentage of the working population in the country, there is no doubt that to achieve the pension industry’s strategic objective of covering 30 per cent of the working population in Nigeria under the CPS by the end of 2024, all hands should be on deck to extend coverage to this important segment of the Nigerian economy,” PenCom stated.
The commission said that due to their widely dispersed nature and generally low and irregular incomes, there was a need to provide a pension plan that would meet their needs.
PenCom said the Micro Pension Plan initiative had been conceived within the context of the industry to bring this class of workers on board.
In implementing this initiative, it stated that the informal sector had been segmented into three broad categories – the low income earners, the high income earners and the Small and Medium Enterprises.