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No pension scheme for 38m informal sector workers yet

…As release of guidelines is stalled

By Victor Ahiuma-Young

FOR about five years now, the National Pension Commission, PenCom’s efforts at introducing the Contributory Pension Scheme, CPS, to the informal sector of the nation’s economy, has not seen the light of the day.

It is estimated that there are no fewer than 38 million workers in the informal sector of the Nigerian economy.

Sadly, a huge number is currently not covered in the CPS introduced into the Nigerian economy following the Pension Reform Act, PRA, 2004 as amended in 2014.

Among these categories of workers are barbers,  hair dressers, cobblers, lawyers, drivers, commercial motorcycle operators, tricycle operators, vulcanizers, mechanics, tailors and market men/women.

Meanwhile, it is estimated that the total adult population of Nigeria is about 94 million with workers in the informal sector constituting over 40 per cent of the total adult population.

PenCom under the last management headed by its Director-General, Chinelo Anohu-Amazu, had engaged critical stakeholders in the informal sector including National Union of Road Transport Workers, NURTW, National Union of Textile, Garment and Tailoring Workers of Nigeria, NUTGTWN and Federation of Informal Workers, FIWON, to prepare them for coverage.

On several occasions, Mrs Anohu-Amazu had informed that the commission was working out a guideline for a seamless coverage of the informal sector workers.

And to fast-track the entry of informal workers into the CPS, the Federal Government provided the necessary legal framework needed for the participation of the informal workers in the PRA 2014 for the inclusion of self-employed individuals in the CPS.

Section 2 (3), of the PRA 2014 aims at extending the coverage of the CPS to self-employed persons.

It was gathered from PenCom that the guidelines for participation of self-employed workers under the Micro-Pension scheme  is almost ready and what is delaying its completion and release is the non-inauguration of the board of PenCom.

Investigation revealed that following the controversial sack of the former board and non-inauguration of a new board, the fate and future of 38 million informal sector workers now hang in the balance.

Though it was gathered that PenCom, through its Micro-Pension Department, is working assiduously to ensure full implementation of  the provision Act once the guideline is released to  secure the future of this neglected workers, absence of a board has stalled that which is in the pipeline.

It will be recalled that at a workshop in Calabar, Cross River State, Head of Micro Pensions Department of PenCom, Polycarp Anyanwu, said the commission would target about 250,000 contributors from the informal sector to enrol into micro pension within six months immediately it is launched.

Anyanwu explained that the micro pension initiative exists for the provision of pension coverage to self-employed persons, avail the contributor access to regular stream of retirement income at old age, improve living standards of the elderly and that contributors are to benefit from the various incentives to be offered by the Pension Fund Administrators (PFAs).

He said incorporating self-employed workers in the organised pension system would deepen financial literacy, deepen financial inclusion, secure financial autonomy and independence of retirees.

At the Calabar conference, Mrs Anohu-Amazu, informed that  employees from the informal sector would increase pension contributors with over 20 million by 2019.

PenCom, she said, had    categorised micro pension in Nigeria to cover three strata starting from the lowest to middle and finally, high income earners.

“As we seek to increase registered pension contributors to at least 20 million by the year 2019, informal sector participation through the micro pension plan is expected to provide impetus,” she said.

The benefits of the implementation of micro pension are enormous as it will increase among others, saving culture, long-term funds, reduce poverty, promotion of growth and development of the capital, jobs    creation and boosting of national economy.

PFAs waiting for guidelines

Already, feelers from the Pension Fund Administrators,    PFAs, indicate that they are only waiting for the guidelines to be released before they swoop on the informal workers for prospective enrollees.

In fact, one of the leading PFAs in the country, Trustfund Pensions Plc, has said it has concluded plans to move into the informal sector of the economy to bring the vast workers into its fold as soon as PenCom releases the guidelines for the self-employed workers’ participation in the CPS.

At a recent Programme in Abuja, Managing Director of Trusfund Pensions, Mrs. Helen Da-Souza,    explained that the untapped informal sector made up of about 80 per cent of the prospective contributors in the country.

Da-Souza said while the scheme had made tremendous inroads into registering workers in the formal sector, the scheme was still without the informal sector, the largest part of the working population.

According to her, Trustfund planned to move into the untapped market as soon as the guidelines were put in place by PenCom , saying “the informal sector makes about 80 per cent of the prospective contributors in the country. So, we are working with National Pension Commission, which is setting up guidelines and platforms to capture this strategic sector of the Nigerian economy.”


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