PenOp Promotes Micro Pension Scheme

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Stories by Ebere Nwoji
With N8.7 trillion assets accumulated in the Contributory Pension Scheme (CPS) since its creation, the Pension Fund Operators Association of Nigeria(PenOp), has urged self- employed Nigerians, artisans and informal sector employers to key into the micro pension scheme.

PenOp is optimistic that the advent of micro pension scheme as a means of saving for the self-employed, artisans and informal sector employers would geometrically increase the quantum of pension assets and provide bumper long term investable funds in Nigeria.

The micro pension scheme was launched in Nigeria barely a month ago by the PenCom.
The commission said its target was to ensure that Nigerians outside the formal sector not accommodated by the contributory pension key into it, as a means of saving for their retirement and guard against old age poverty.

The CPS has been running for a decade and half in Nigeria, but has been targeted at only the public and formal sector operators.
Though after the 2014 review of the 2004 Pension Reform Act, employers with up to three employees were said to have qualified to key into the scheme, the modus operandi of the scheme left much to be desired by the micro economy operators, prompting the commission to launch the micro pension special scheme for the informal sector operators to key in.

But PenOp Chairman, Mrs Ronke Adedeji, while addressing the media on the micro pension scheme at the quarterly press briefing organised by the association in Lagos, said the scheme was extremely important to Nigerians, adding that pension generally is meant to provide for financial stability of people at their old age.

She said though pension fund administrators have started registering contributors into the micro pension scheme, Nigerians need awareness and enlightenment to understand and key into the scheme.
“Micro pension scheme is very significant and important we need a lot of enlightenment campaign, education and publicity is key to the success of the scheme”, Adedeji said.

She said because of the all-important nature of micro pension scheme and the need for Nigerians who were not captured into the contributory pension scheme to be enlisted into the new initiative, a lot of incentives have been introduced into the new scheme. This include freedom of a contributor to pay in and withdraw up to 40 per cent of his contribution anytime, simplicity of the registration language and easy access to the contributed funds.
Both Adedeji and the Executive Secretary of PenOp, Susan Orange, were worried about public acceptance of the micro pension saying it will take time because of high level of ignorance.

She however said the pension fund operators would use different strategies including agents and electronic gadgets in marketing the scheme to Nigerians.
She said the BVN data base would be of immense help to them in this regard, saying operators would use electronic platforms to drive the process.
PenCom, had last year developed a framework for the implementation of the provisions of Section 2(3) of PRA 2014 on Micro Pension Plan.

Micro Pension refers to an arrangement for the provision of pension plan to the self-employed and persons operating in the informal sector through the CPS.
With the official launch of the scheme recently, both pension fund operators and the regulator Pencom, have been advised to use various channels of communication in educating members of the public on the initiative.
Industry stakeholders and observers said the most important and effective channels should be periodic town hall meetings with trade unions, trade associations and cooperatives. This is expected to educate members, proffer clarifications and address concerns on the scheme.