Currently as we speak they have paid almost 260billion to retirees from the inception to March 2015. As at last year, we had 5.5million contributors in the contributory pension scheme, it has gone up by 6.4million and we have just ended the first quarter.
The essence of PenOp’s involvement in the May Day celebration, we were here last year and we are here again this year. It is to celebrate the Nigerian worker, to celebrate the hard work that Nigerians go through everyday. To encourage them to prepare for the future. As you are working as hard as you are working today, you must know and remember that there will be a time when you can’t work as hard as you work today. When you retire ad your salary stops coming in, NEPA bill will still come, you will have to meet the needs of your wife, the children will still need food. That is the essence of having a pension.
We are urging all young professionals and people just entering the work force and people in the middle of their career to join the contributory pension scheme. It is 8% of your basic salary, housing and transport. At the end of the day it is very little. Your employer is required to match it with 10% of that same emolument and that goes into your account. The contributory pension scheme is not really new because it has been in existence for about 11 years now and hugely successful.
Currently as we speak they have paid almost 260billion to retirees from the inception to March 2015. As at last year, we had 5.5million contributors in the contributory pension scheme, it has gone up by 6.4million and we have just ended the first quarter.
For the people in the informal sector, we recognize that the informal sector contributes to the bulk of the Nigerian economy, so they cannot be ignored. The only difference is that they have a very different way of funding. Some are paid monthly, while some weekly, some may not even see the pay in another 2 months. There has to be a framework that caters to the uniqueness of the informal sector and the National pension Commission and Penop are collaborating and working very hard on a framework that will accommodate the informal sector. So that everybody who works will have the opportunity to set up a retirement savings account. This framework is being discussed among the operators, stakeholders and the National Pension Commission.
Speaking on the percentage of compliance since its inception, she said: the population of Nigeria is approximately 172million people, say half of this is the working population. we are saying approximately 80 million people and we have 6.4million currently in the contributory pension scheme. This is a wide gap, which is why in the pension reform act of 2014, compliance is a major issue. Employers are demanded by the law to set up retirement savings account for their employees and make sure they remit. For those employers who do not comply, the National Pension Commission has recovery agents that will track them down. You must set up a pension system for them, they must be members of the contributory pension scheme. Any employer who does not comply will be held liable by the law. Employees deserve to have their pensions; they deserve to be looked after. The employer should think about the future of the employees and be concerned about them. This will make the employer happy. A happy worker is a productive worker, a productive worker makes the business grow, when the business grows, Nigerian economy grows and everybody is happy.
There are still so many people who need to be educated, not just about pension but financial literacy. PenOp is also involved in the National Financial Inclusion System, where we are trying to increase the level of financial literacy across the country and it is our core responsibility to raise the awareness. So, we arrange forums with the media, employers in different locations to get people educated, talk to them and let them know what it is all about. That is why we enjoin the media to work with us in letting people know that this system is working and it is safe.