About 28,000 contributors joined the Micro Pension Plan (MPP) in the last seven months following the official launch of the plan early this year.
Speaking recently, the Head of the Corporate Communication of the National Pension Commission (PenCom), Mr Peter Aghahowa said 19 Pension Fund Administrators (PFAs) who operate the micro pension scheme registered the contributors as at the end of October 2019.
Data sourced from PenCom show that pension assets in Nigeria transited from billions of deficits to N2.9 trillion as at 2012, and this rose to N6.1 trillion as at December 2016 and to N9.4 trillion as at August 2019.
To further deepen the growth in pension assets, with a target of N20 trillion worth of assets by 2020, President Muhammadu Buhari launched the MPP on March 28, 2019, to accommodate over 69 million workers in the informal sector in the 15-year Contributory Pension Scheme (CPS) in Nigeria.
A tricycle (keke NAPEP) operator, Sagir Shawai, made history as the first micro business owner to have been registered on the MPP.
Shawa was personally registered by the President on the official launch of the scheme in Abuja.
The MPP, an initiative of PenCom, was designed to capture informal sector workers such as traders, farmers, mechanics, drivers, tailors and small businesses with less than three employees that were not fully captured in the mandatory contributory pension for the formal sector.
National Bureau of Statistics (NBS) estimates show that the informal sector constitutes an estimated 69 million workforce in the country and represents an estimated 88 per cent of Nigerian workers that lack pensions and safety nets for their old age.
PenCom’s goal is to achieve coverage of 30 million people in the informal sector by 2024, according to a statement previously released by the pension industry’s apex regulator.
Through MPP, the Federal Government targets reduction of old-age dependency by 85 per cent, increased contributory pension membership and growth in pension assets.
The Pension Reform Act (PRA) 2004 was amended in 2014 to widen the scope of coverage to include the informal sector and PenCom formulated the framework for the Micro Pension Plan.
Section 2(3) of the Act provides that employees of organizations with less than three employees as well as self-employed persons shall be entitled to participate under the Contributory Pension Scheme in accordance with Guidelines issued by the Commission.
The categories of persons referred to in Section 2(3) of the PRA 2014 constitute the vast majority of the working population. They are mostly the unemployed tailors, artisans, road transport workers among others.
For seamless implementation of the MPP, PenCom instructed PFAs to transit from the Contributor Registration System (CRS) to the Enhanced Contributor Registration System (ECRS).
The ECRS is an electronic platform for the submission of requests by PFAs for the registration of contributors and issuance of Personal Identification Numbers (PINs).
The ECRS, integrated with the National Identity Management Commission (NIMC) for authentication of the uniqueness of individuals seeking to register under the CPS, provides a more dynamic user Interface to address the uniqueness of MPP.
As the pension industry works towards commencing a robust enlightenment campaign to educate informal sector workers of the enormous advantages of the Micro Pension Plan, it is expected that the sector would embrace the opportunity.