Veritas boosts financial inclusion via micro pension plan

Veritas Glanvills Pensions (VG Pensions) has expanded retirement planning to ensure financial inclusion of the informal sector with active participation in the Micro Pension Plan (MPP).

The MPP, launched in 2019 by the National Pension Commission (PenCom), was designed to cater to the vast informal sector, offering a retirement savings option for self-employed individuals and those working in organisations with fewer than three employees.

The Pension Manager stated that while the pension schemes have historically been seen as the reserve of formal sector workers, the MPP has shifted that narrative by offering an accessible and flexible solution for low-income earners and independent professionals such as architects, lawyers, artisans, traders, and small business operators. 

The firm, in a statement, explained that the plan is inclusive of associations, unions, cooperatives, and more, ensuring that workers without traditional employment structures can also plan for their retirement.
The firm referenced PenCom’s latest data which reveals significant growth in the uptake of the MPP, with 12,559 new Micro Pension Contributors (MPCs) registered in the first quarter of 2024. 

According to the firm, since the inception of the scheme, a total of 126,941 contributors have signed up, with over N791.57 million in contributions collected by the end of the first quarter of 2024. 

This steady growth, the firm stated, is a testament to the increasing awareness among informal sector workers about the importance of securing their financial future.

The firm said the MPP allows contributors, who must be at least 18 years old and have a legitimate source of income to make regular financial contributions toward their retirement or in case of incapacitation. 

According to the firm, the plan’s peculiar feature is the flexibility it offers, noting that contributions can be made daily, weekly, or monthly, depending on the contributor’s convenience, reflecting the income volatility often seen in the informal sector.

This flexibility, according to the firm, is reinforced by the scheme’s contribution structure, which divides deposits into two parts: 40 per cent which is also known as Contingent portion, and available for withdrawal after three months for emergency needs, while the remaining 60 per cent is reserved for retirement. 

The firm stated that access to the Retirement Benefit portion begins at age 50 or earlier if health reasons arise.

The firm stated that as the MPP continues to gain traction, its role in supporting Nigeria’s informal sector workers through tailored pension solutions is set to make a lasting impact on the nation’s financial inclusion landscape.