The National Pension Commission, (PenCom), said that it will soon unveil an initiative to provide pension coverage to self employed Nigerians.
The initiative called Micro Pension (MP) project is already at an advanced stage. The initiative will cover three strata, the low, middle and high income earners, targeting 20 million self employed by 2019. The MP project targets mainly artisans, mechanics, tailors, farmers and other forms of businesses in the informal sector.
Head, Micro Pensions Department, Mr Polycarp Anyanwu disclosed this at a seminar. He said the Micro Pension Scheme was an offshoot of the Pension industry 5-year strategic plan. This plan includes expanding the coverage of the Contributing Pension Scheme (CPS) to 20 million contributors by 2019.
Anyanwu added that the informal sector is largely uncovered by any structured pension. It represents over 70% of Nigeria’s total working population in the country. He also described the peculiarities of the individuals that operate within the Informal Sector. They include Irregular flow of income, highly mobile and flexible jobs, Lack of permanent work address, Lack of official means of Identification and other documents.
Also, he quoted Section 2(3) of the Pension Reform Act, 2014. He said it extended coverage of the Contributory Pension Scheme to self-employed persons. But for micro pension, they have breakdown of family support and there was need to avert old age poverty.
Micro Pension Features
Anyanwu further described the micro pension features. According to him, it has simplified registration process, flexible frequency of contribution, easy method of contribution remittance. He also stated that contributions would be split into two. A smaller percentage shall be savings and accessible to the contributor while the greater percentage shall be strictly for pension. In addition, he said the same individual portable retirement savings account managed by PFAs and funds kept in custody of the PFCs.
He said that strict regulation of the investment of Micro Pension funds needed to guarantee safety and fair returns on investment.
The Commission planned to partner with trade Unions/Associations to assist introduce members to the Scheme for the Pilot phase. Meanwhile media professionals are
expected to assist to enlighten the public and create awareness of benefits and need for MP.
Apart from targeting that 250,000 contributors would be enroll within 6 months the Commission said it will test ICT technology to ensure adequacy.