President Muhammadu Buhari on Thursday launched a Micro Pension Plan for operators in the nation’s informal sector with a promise to address the constraints undermining the efficiency of the pension system.
The President said that government initiated the latest plan in order to ensure that those in the informal sector were captured in the pension scheme just like their formal sector counterparts.
The Micro Pension Plan is expected to cover an estimated 80 million people working in the informal sector of the economy, including market women, the National Union of Road Transport Workers, members of textile, garment and tailoring associations, tricycle operators and Okada riders.
Others targeted for capture under the plan are butchers associations, workers in the movie and performing arts industry, mechanics and other workers in the automotive industry and single professionals like lawyers, accountants and many others.
Speaking further on the initiative, the President explained that despite its lean resources, the his administration would continue to support the National Pension Commission (PenCom) in order to implement the new plan successfully.
To ensure this, President Buhari directed that the Financial System Strategy 2020 should support the plan through its financial inclusion programme.
On the success recorded by the government over the past few years through its social intervention programmes, the president said the his administration had provided grants, technical support and loans to small businesses, adding that through the interventions, the lives of many Nigerians had been transformed.
He pointed out that having achieved so much through the creation of a more conducive environment for businesses to thrive, it was logical to have a social protection plan in form of pension for operators in the informal sector of the economy.
Earlier in her remarks, the acting Director-General, PenCom, Aisha Dahir-Umar, said that about N6.51 trillion, representing 73 percent of the nation’s pension assets, had been invested in government securities.
The pension management expert hinted that N95.31 billion was invested in infrastructure just as another N7.19 billion was subscribed into the Federal Government’s Green Bond.
According to her, under the Micro Pension Plan, 40 percent of the amount contributed could be accessed by contributors for contingency purpose while the balance of 60 percent would be set aside for retirement benefit.
She explained that while contributors could start drawing from their 40 percent contributions after three months of making the initial deposit, the 60 percent balance could only be accessed at the age of 50 or during retirement.
The PenCom boss projected that the successful implementation of the Micro Pension Plan had the potential of reducing old age poverty level in the country by 85 percent.
Dahir-Umar said: “This event is remarkable because it unveils a unique financial product, which democratises 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.
“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.
“With the formal launch 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 economic development.
“The Commission would collaborate with relevant stakeholders to sensitise and enlighten the target participants and the public on the features and benefits of the plan”, she assured.