Pension Commission, PenCom, has hinted of its plan to rejig the informal pension scheme, commonly known as Micro Pension Plan (MPP) to address the challenges facing it since its launch.
Recall that former President Muhammadu Buhari launched the MPP in March 2019.
The MPP is a voluntary programme that allows workers in the informal sector and self-employed people to contribute to a pension fund.
The MPP is part of the Contributory Pension Scheme (CPS) which was expanded in 2014 to include the self-employed and people working in organizations with fewer than three employees.
The informal pension scheme aims to provide retirement benefits to people who traditionally lack access to structured retirement savings, it also allows contributors to make partial withdrawals from their funds after a certain period of contribution.
However, since its launch, among the challenges MPP included low public awareness and negative perceptions about pension products. All attempts to address some of these problems have been futile.
Speaking at the 2024 PenCom Media Conference in Lagos, the new management of PenCom headed by Ms Omolara Oloworaran, has hinted at an ambitious plan to rejig the scheme aimed at attracting no fewer than 20 million informal sector operators.
It is widely believed that this group accounts for 92.7 per cent of the working-age population in Nigeria including business owners and artisans, and for organizations with fewer than three employees.
As of March 31, 2024, a mere 126,941 people have registered for the MPP in Nigeria since it was launched in 2019.
The government’s goal at the launch was to enroll 8 million people in the MPP within five years, but as of June 2022, it had only registered 77,689 people, which is less than 1 per cent of the target.
Reacting to a question on MPP, Ms Oloworaran explained that the current micro pension plan does not adequately resonate with all segments of the informal sector operators.
According to her, “We want to rebrand and remodel the Micro Pension Plan to make it more inclusive and relatable, particularly for individuals in the informal sector. Whether you are a farmer, a fashion designer, or a trader, we want the plan to speak directly to your unique needs.”
On expanding the micro pension coverage, Ms Oloworaran stressed the need for a remodeled product and highlighted the potential of the informal sector, with the goal of bringing in no fewer than 20 million operators into the scheme.
She said “Technology will play a critical role in achieving this target. We are working to ensure that we have the right systems in place to manage the scale and incentivize participation. Operators will also play a more active role once the product is revamped.”
The Director General trumpeted her passion towards ensuring that struggling Nigerians, particularly those at the lower end of the social spectrum, benefit from the initiative.
Ms Oloworaran informed of the commission’s plans to create tailored incentives to encourage participation and savings for the future.
Earlier in her keynote address, she among others, said “Since assuming office, my team and I have been focused on strengthening compliance, enhancing service delivery, diversifying pension assets to optimize returns, improving benefits, and expanding coverage to include more Nigerians, especially those in the informal sector.
“The micro-pension initiative, in particular, is something we are very passionate about. It is our way of saying that no one should be left behind, no matter how small their earnings might be. Technology plays a vital role in driving this inclusion, from mobile enrollment to real-time account management to benefits administration. We intend to use technology to scale the micro-pension plan.”
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