PenCom presses private sector, artisans to boost retirement savings
By Jeph Ajobaju, Chief Copy Editor
Artisans – mechanics, vulcanizers, bricklayers, tailors and the like – are being pressed along with the organised private sector (OPS) to join the Micro Pension Plan (MPP) by the National Pension Commission (PenCom) to shore up retirement savings.
PenCom Head of Micro Pensions Dauda Ahmed said the MPP was introduced by the Pension Reform Act (PRA) 2014 to enable those working in organisations with fewer than three employees and self-employed individuals to voluntarily participate in the Contributory Pension Scheme (CPS) and save for their retirement.
“The MPP presents a significant opportunity for workers in the informal sector to secure their future through retirement savings,” Ahmed pitched at PenCom Day at the Lagos International Trade Fair organised by the Lagos Chamber of Commerce and Industry (LCCI).
He noted the level of awareness of the scheme among artisans, entrepreneurs, and other informal sector operators has increased in the past few months.
“Over 97,000 contributors have registered for the Micro Pension Plans=. However, the Commission has witnessed an improvement in terms of enrollment mainly because of an increase in awareness in the country.”
Ahmed disclosed PenCom’s participation in the yearly trade fair is one of the strategies it uses to sustain the momentum of the MPP.
“The trade fair is a forum that attracts business people and stakeholders that we feel should be part of the micro pension system and this is a forum for us to interact with those stakeholders to explain to them what benefits they stand to get from the micro pension.
“The response has been quite encouraging. We have had interactions with participants, and we have enlightened them on what the plan is all about and how they can benefit from the initiative.”
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Cash in hand matters in old age
“We have been reaching out to unions, and leadership of associations, to have discussions with them so that they can convince their members to join the plan, because in old age, what matters is the cash that you have, not necessarily the assets that you have,” Ahmed added, according to reporting by The Guardian.
“So, if you have something that can give you a steady income, you want to sustain it.”
PenCom Head of South West Zonal Office Sola Adeseun, who represented Director General Aisha Dahir-Umar, explained that “Participating at the trade fair is just one of our strategies in creating awareness about MPP.
“Apart from this, PenCom also reaches out to market women across the country to have sessions with them so that they can also contribute to the Micro Pension Plan to have something to fall back to in their retirement.”
Adeseun said the MPP is being embraced in Lagos and the zonal office is intensifying efforts at creating more awareness of it in the South West.
LCCI President Michael Olawale-Cole commended the pension industry for its success over the years, with a contributors’ base of about 10.1 million people and total pension assets at N17.35 trillion as of September 2023.
But he stressed the 10.1 million contributors cover only 16.8 per cent of the working population in Nigeria, which means there a significant headroom for growth.
Despite significant success achieved so far, Olawale-Cole added, there is still need for the pension industry to tackle obstacles to its progress, which include inconsistent policies, delay in payment of pensions and gratuities, a high number of defaulting employers, and weak enforcement of non-compliance with the Pension Act.