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Benefits of Micro Pension Plan Excite Traders at 44th Kaduna International Trade Fair
The National Pension Commission (PenCom) participated in the recently concluded 44th Kaduna International Trade Fair, organised by the Kaduna Chamber of Commerce, Industry, Mines and Agriculture (KADCCIMA) in collaboration with the Kaduna State Government.
The Kaduna State Governor Nasir El-Rufai, represented by the Permanent Secretary, Kaduna State Ministry of Business, Innovation and Technology, Dr Yusuf Sale, officially opened the Fair. The Fair provided PenCom the opportunity to interact and sensitise members of the public on its functions, the workings of the Micro Pension Plan (MPP), and how the Contributory Pension Scheme (CPS) operates for the benefit of workers and retirees. The MPP targets the informal sector, comprising Micro, Small and Medium Enterprises (MSMEs), private sector establishments with less than three employees and self-employed persons such as footballers, musicians, actors, painters and even lawyers and architects.
Section 2(3) of the Pension Reform Act, 2014 (PRA 2014) permits employees of organisations with less than three employees and self-employed persons to participate in the CPS. Accordingly, PenCom introduced the MPP to cover persons in the informal sector. Workers in the informal sector, many of whom attended the Kaduna Trade Fair, constitute the vast majority of the working population in Nigeria and are not covered by any retirement benefits scheme. Accordingly, MPP refers to an arrangement to provide pensions to the self-employed and persons operating in the informal sector.
PenCom showcased the benefits of the MPP as part of its strategy to expand pension coverage to the informal sector. The MPP guarantees a secured future through steady income at retirement, thereby reducing old-age poverty. During the Fair, officials of PenCom interacted with participants and educated them on the benefits of the MPP.
Other benefits of the MPP include the following:
• Flexible contribution remittance.
• Achievement of economic stability objectives of contributors and financial independence at retirement.
• The option to withdraw part of savings (40% of contribution) before retirement.
PenCom’s stand at the Trade Fair was operated by staff who provided customer care services and clarified the workings of the CPS, with emphasis on the MPP. Numerous visitors, including Retirement Savings Account (RSA) holders, interested members of the public and students from various schools, were hosted at the stand. PenCom publications, which included Frequently Asked Questions (FAQs) on the CPS and MPP, were distributed to participants at the Fair. Traders and visitors who thronged PenCom’s stand were excited to learn about the MPP.
Enrolment into the MPP is simple and flexible. The minimum age for registration under the MPP is 18 years. New MPP participants are required to undergo registration with any Pension Fund Administrator (PFA) of their choice. Registration involves opening an RSA by completing a registration form. Once the RSA is opened, the Micro Pension Contributor (MPC) is issued a Personal Identification Number (PIN) by the PFA. Self-employed persons belonging to a Trade, Profession, Cooperative or Business Association; persons with a business name registration, partnership or enterprise; Employees operating in the informal sector who work with or without formal employment Contract; and Other self-employed individuals are eligible to participate in the MPP. Such individuals must reside in Nigeria.
From inception to 31 December 2022, PFAs have registered 89,327 MPCs. Also, ₦368.03 million has been received as contributions from MPCs from inception to 31 December 2022. The MPP membership is rising as more informal sector participants realise the benefits of the Plan.
In conclusion, traders and artisans at the 44th Kaduna International Trade Fair expressed excitement over the huge benefits of the MPP under the CPS. PenCom highlighted the prospects of the MPP at the Kaduna Trade Fair. The effective regulation and supervision of the pension industry in Nigeria remain PenCom’s priority.