The National Pension Commission (PenCom) has disclosed that 72,000 participants have been registered under the Micro Pension Plan (MPP) as of November 2021.
This was disclosed by Head, Micro Pension Department, PenCom, Dowda Ahmed, said at the Pension Fund Operators Association of Nigeria (PenOp) Yearly Media Parley in Lagos, themes, “Micro Pension – Challenges and Opportunities.”
He also pointed out the category of people under the scheme. Ahmed stated that the scheme is designed for the informal sector, such as the self-employed or organisations that could not participate in the Contributory Pension Scheme (CPS) because they do not have a minimum of three employees as specified by the CPS Act.
Speaking at the event Mr Ahmed said, “These include small-scale business owners, petty traders, artisans, and entrepreneurs, among others.
“The micro pension was put in place to curb old-age poverty by assisting people to contribute while working and have long-term savings they could fall back on when they become old.”
Whilst he noted that the scheme is voluntary against the CPS which is mandatory, Ahmed added that the amount to be contributed and the frequency of contribution are determined by the contributor while the commission has strict regulation and monitoring of the micro-pension scheme.
“MPP is based on individual and personalised Retirement Savings Account (RSA), as only the RSA holders have access to the balance in the account.
“There is the separation of management and custody of the pension funds which ensures that Pension Fund Administrators (PFAs) who manage the fund, do not have direct access to them as the funds are kept by the Pension Funds Custodians (PFCs),” he added.
The Pension Reform Act (PRA) 2014 expanded coverage of the CPS to the self-employed and persons working in organizations with less than 3 employees to achieve the Pension Industry’s strategic objective.