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Voluntary micro-pension slowing months after take-off

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The target of the Federal Government to mobilise over N3 trillion into the pension fund and achieve coverage of 30 million people in the informal sector by 2024 through the Micro Pension Plan (MPP) may be a tall order, as much progress is yet to be made on the plan, five months after it was launched.

The Guardian reliably gathered that the pace of registration for micro pension by the informal sector is slow compared to the progress made under the Contributory Pension Scheme(CPS), when it was five months old.

Market observers believe the nature of micro pension scheme and its voluntary nature means the pace of growth would be slower compared to CPS that has been made compulsory by law.

As it stands, only a pocket of players in the informal sector are approaching the Pension Fund Administrators (PFAs) to register for the Plan, even though operators are very careful to ensure that the data collected from Micro pension contributors have the needed quality in a bid to protect the integrity of the new pension scheme.

Investigations revealed that most PFAs have invested in Information Technology (IT) and manpower by setting up a separate department for micro pension plans, the patronage is not encouraging.

President of the Pension Fund Operators Association of Nigeria (PenOp), Mrs Aderonke Adedeji, who is also the Managing Director of Leadway Pensure, told The Guardian how her organization rewarded 10 Nigerian entrepreneurs with its PensureHustle campaign to woo others to compliance.

“We are dedicated to supporting and promoting socio-economic progress, while maintaining our record of excellent pension management services. That is why we persistently look for opportunities to help our customers advance in their chosen careers and get more out of life,” she said.

It should be recalled that late last year, Leadway Pensure sponsored 20 individuals for various short courses and certifications through their let me show you the leadway campaign.

These initiatives are all parts of the brand’s goal to help Nigerians get more out of life in the best possible way.

The campaign, which was open to business owners from all walks of life and living in Nigeria, received lots of entries from participants who were required to follow the company’s social media pages and upload a 60 second video stating their business goals and what business support items they require to achieve the said goals.

Projecting its commitment to the future financial security of the Nigerian citizens, Micro Pension Retirement Savings Accounts were opened for the 10 winners to help them plan towards retirement.

Leadway Pensure has, over the years, has introduced technology-driven products and services aimed at improving customer experiences, as well as innovations like the new SureCal, an online tool that helps individuals look into their future lifestyle at retirement and helps them plan better.

She said, the flexibility of the micro pension plan means operators have to be careful during registration for any subscriber, so that, money contributed doesn’t fall into the wrong hand.

“The way the plan is structured gives room for subscribers to withdraw part of their savings to meet their respective financial needs, hence, care must be taken, during registration to ensure that those who draw from a micro pension account are the owners of such accounts. So, operators are thorough during registration,” she said.

The Managing Director/Chief Executive Officer, ARM Pension Managers, Wale Odutola, who also spoke to The Guardian, said though operators envisaged this initial hitch, as the time progresses and more people are aware of its immense benefits through increased awareness, the number of contributors will continue to grow on a regular basis.

The pioneer Director-General, PenCom, Muhammed Ahmad, advised industry stakeholders, especially, the regulator to make pension scheme a private sector-driven initiative by persuading players to key into the new pension scheme.

This, he said, would not only lead to influx of private sector operators into the pension system in the country, but would allow pension contributors live a good life at retirement.

Believing that the micro pension scheme is another platform to bring in more private sector operators, he said, the scheme must be professionally handled as the template of its operation vary from the conventional pension scheme.

However, market observers believe the informal sector constitutes an estimated 69 million workforce in the country and represents an estimated 88 per cent of Nigerian workers that lack pensions and safety nets for their old age.

The Head, Corporate Communications, PenCom, Peter Aghahowa, said PenCom and pension operators will continue the education and sensitisation of the public through robust campaigns across traditional, social and digital media, while registration of contributors will follow in subsequent months.
The commission, he noted, remains committed to good corporate governance and high ethical standards that will ensure the success of the Micro Pension Plan.


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