The National Pension Commission has revealed plans to integrate over 60 million informal workers into the national pension scheme.
The Director-General of PenCom, Mrs. Omolola Oloworaran, disclosed this during a one-day capacity-building workshop by the Labour Writers’ Association of Nigeria, themed “Challenges of Nigeria’s Economic Downturn: Survival Options for Workers”, which was held in Lagos recently.
Oloworaran said, “By expanding pension coverage to this underserved sector, the initiative seeks to provide greater financial security and sustainable retirement options for workers in the informal economy to avert the pressing issue as millions risk retirement poverty.”
Data from the National Bureau of Statistics revealed that the informal sector represented over 65 per cent of Nigeria’s workforce.
Yet, only about 12 per cent of the working population has any form of retirement savings, leaving millions vulnerable to old-age poverty.
Oloworaran, stated, “For us at PenCom, the contributory pension scheme has always been supporting workers because they are the bedrock of support that helps the contributory pension scheme.”
Despite the economic challenges, she noted that the pension fund assets that were under management had continued to grow.
She mentioned that the micro pension plan was especially useful during tough economic times, as it allowed informal sector workers with savings to withdraw up to 40 per cent of their contributions as a contingent portion to address immediate financial needs.
PenCom launched the Micro Pension Plan in 2019, aimed at informal workers, such as artisans, market traders, and small business owners, providing a flexible, contribution-based pension scheme.
According to the Nigeria Labour Force Statistics Report Q2 2023, the informal employment rate then was 92.7 per cent.
As of 2023, only about 70,000 informal workers are registered in the scheme, representing a small fraction of the total population in need of pension coverage.
Also, a survey by the Lagos Business School found that over 60 per cent of informal workers were unaware of pension schemes available to them.
Meanwhile, the International Labour Organisation estimated that 93 per cent of employment in Nigeria was informal, with 95 per cent of women and 90 per cent of men in this sector.
It added that about 50 per cent were self-employed, while the rest worked for small or medium informal businesses.
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