The National Pension Commission (PenCom) has disclosed its resolve to generate additional N3 trillion assets and 20 million contributors from the micro pension scheme.
Acting Director-General of PenCom, Mrs. Aisha Dahir–Umar, stated this when she also disclosed that the commission is currently consulting with relevant stakeholders on how to drive and harness opportunities embedded in the newly launched micro pension scheme.
The Pencom boss said, the targeted N3 trillion would be in addition to the existing
N8.7 trillion assets already accumulated in the contributory pension scheme.
Dahir-Umar said PenCom and the pension fund operators have developed information technology to support the micro pension distribution plan.
She also said the commission, has engaged the informal sector groups, such as the Nigerian Union of Textile, Garment and Tailoring Workers of Nigeria, a body consisting of self-employed tailors and garment workers; partner trade associations, non-government organisations and religious bodies, in a bid to persuade them to subscribe to the scheme.
She spoke on other benefits built in by the commission to make the scheme attractive to the target population, saying its implementation would improve the standard of living of the informal sector participants at retirement and reduce dependence on extended family for support.
“The implementation of the micro-pension plan will improve the standard of living of the informal sector participants at retirement and reduce dependence on extended family for support at retirement,” she explained.
The plan, when operational, would capture the self-employed people, especially, those with irregular income, usually in the informal sector and, “are largely financially uninformed with limited or no access to financial services, especially, pension plan,” she said.
Section 2(3) of the Pension Reform Act, 2014 legal framework extends the coverage of the CPS to self-employed persons through the micro-pension scheme.
Dahir-Umar said that self-employed people and workers in the informal sector could reap enormous benefits by participating in the plan.
She said the initiative, in addition to providing income for people at old age and in developing a savings, would afford them the opportunity to connect to other programmes of the government while helping to finance infrastructure across the country.
“Subscribers could, as well, use the balance in their Retirement Savings Accounts as equity contribution for residential mortgages and support their businesses,” she added.
Additional benefits to self-employed persons and informal sector workers include the cover being provided under the Pension Protection Fund, she said.
She stated that under the arrangement, the government would bridge shortfalls or financial losses from the investment of their accumulated retirement savings and guarantee them minimum pension in retirement, irrespective of how much they were able to save before retiring.
She also said the plan would be funded by an annual subvention of one per cent of the monthly wage of federal government employees, the annual levy on PenCom and pension operators as well as pension fund investment income.