By Victor Young
•As Micro Pension scheme kicks-off
THE Micro Pension Scheme, MPS, has finally kicked-off after close to six years of planning and delays with the formal launch of the Micro Pension Plan, MPP, by President Muhammadu Buhari, on Thursday, March 28, 2019.
The plan was conceived by the immediate administration of the National Pension Commission, PenCom, with Mrs Chinelo Anohu-Amazu.
However, the since the appointment of Aisha Dahir-Umar, as the acting Director-General of PenCom, in April 2017, the drive for the launch of the scheme got a boost cumulating into its launch by President Buhari at the State House.
With the launch, workers in the informal sector of the economy, such as market women, traders, commercial bus or taxi drivers, commercial motorcycle operators( Okada riders), Tricycle operators (Keke riders), tailors, vehicle mechanics, among other artisans and other operators of the informal sector of the economy, now have opportunity to plan for a better retirement life.
Speaking at the launch, the acting Director General of PenCom, stressed that the launch was remarkable because “it unveils a unique financial product, which democratizes the savings culture in Nigeria in a systematic and efficient manner. The product also perfectly aligns with the current social empowerment programmes of the Federal Government as it seeks to ensure, in the long term, the sustainability of the benefits of the empowerment programmes for the participants, who may seize this opportunity to save for their old age.
Micro Pension Plan targets the significant majority of Nigeria’s working population who, incidentally, operate in the informal sector. Participants are expected from various informal sector workers including market women, members of the National Union of Road Transport Workers (NURTW), members of Textile, Garment and Tailoring Associations, Keke Napep and Okada Riders Associations, Butchers Associations, workers in the Movie and Performing Art industry, mechanics and other workers in the automotive industry and single professionals like lawyers, accountants and many others.
Micro Pension Plan is designed to fit the peculiarities of these informal sector groups. The National Pension Commission had extensively engaged all relevant stakeholders and obtained their inputs before the product was developed to suit their requirements. The product is flexible with respect to contribution amount and the channel of remittance of contributions to the respective pension accounts. Access to accumulated contributions is also flexible, seamless and facilitated by technology through varied payment system platforms.
According to her “The National Pension Commission has issued a robust Guideline on Micro Pension Plan pursuant to the provision of Section 2(3) of the Pension Reform Act 2014. The Guideline spelt out detailed legal, institutional and operational frameworks for the administration of the product by licensed pension operators from the point of enrolment to the point of accessing benefits from the pension account by participants. Already, the licensed Pension Fund Operators have, pursuant to the Guidelines, put in place appropriate structure, infrastructure and trained manpower to ensure adequate coverage and the provision of excellent customer service to the Micro Pension Plan participants.
“A prospective Micro Pension contributor is required to open a Retirement Savings Account (RSA) by completing a physical or electronic registration form with a Pension Funds Administrator (PFA) of his/her choice. The contributors may make contributions daily, weekly, monthly or as may be convenient to them. Every contribution shall be split into two, comprising 40% for contingent withdrawal and 60% for retirement benefits.
The contributor may, based on his/her needs, periodically withdraw the total or part of the balance of the contingent portion of his/her RSA, including all accrued investment income thereto. The contributor may also choose to convert the contingent portion of the contributions to the retirement benefits portion. The remaining balance in the RSA shall be available to the contributor upon retirement or attaining the age of 50 years.
“Pursuant to its regulatory and supervisory mandate, the Commission had established a separate Department dedicated to the supervision of all matters relating to Micro Pension Plan, including enforcement of compliance with the Guidelines and customer complaint handling and resolution. Our objective is to ensure efficiency and effectiveness in service delivery as well as transparency and accountability in the administration of the product by licensed pension operators.
She added that “with the formal launch today and subsequent successful implementation, the Micro Pension Plan is expected to significantly expand pension coverage to greater number of Nigerians and further generate additional long term funds for Nigeria’s economic development. The Commission would collaborate with relevant stakeholders to sensitize and enlighten the target participants and members of the public on the features and benefits of the Micro Pension Plan.”