PenCom motivates informal sector, self-employed professionals with micro pension benefits
PenCom Staff at the event. Representative of the Ag. Director General of PenCom (middle)
Nike Popoola
The National Pension Commission (PenCom) has said it is making the Micro Pension Plan attractive to the informal sector workers and other self employed professionals, through beneficial plans.
Executives of PenCom disclosed this during the Special Day event of the National Pension Commission at the sideline of the Lagos International Trade Fair at the Tafawa Balewa Square, Lagos Island on Friday.
The event was a public sensitisation on the inclusion of the informal workers and the self-employed under the Contributory Pension Scheme (CPS) through the Micro Pension Plan.
The Zonal head, PenCom, Southwest Zonal office, Akinsola Adeseun, who represented the Ag. Director General of PenCom, Ms. Omolora Oloworaran, said, PenCom is in charge of regulation and supervision of pension industry in Nigeria, ensuring that retirees get their pensions as at when due.
While assuring of confidence in the Contributory Pension Scheme (CPS), he said the retirees are paid as at when due because the scheme is fully funded.
According to him, “The employer and employee both contribute. The employer contributes 10 per cent, while the employee contributes a minimum 8 per cent, making 18 per cent all together, and this goes into the Retirement Savings Accounts (RSA) of the workers so that when they are retiring, the money is already invested, and it is ready for them to be taken out as their pensions at retirement.
Speaking with journalists at the event, the Head of Micro Pension Department, PenCom, Dr. Babatunde Alayande, explained that Micro Pension Plan is not just for the informal sector, but also for self employed professionals such as the self employed lawyers, town planners, engineers among others.
He said PenCom will intensify its awareness and sensitization programmes on micropension.
According to him, “Part of what the commission is looking at is the need to modify the name, micro pension, so that everybody will know that this is beyond informal sector.
“The commission is working assiduously to make sure that there are incentives for people participating in this micro pension plan, especially, incentives for the informal sector.
“Part of the focus of the commission in this respect is the need to incentivize the informal sector participants with basic health insurance plans to encourage them, so they do not just bring money and save, but have other benefits.
“The commission has ensured that contribution into Micro Pension Plan is flexible in the sense that you can contribute daily, weekly, monthly or quarterly, depending on the type of work you are doing.”
He explained that the RSA contribution of the micro pension participant is split into two, comprising of the contingency and the withdrawal parts.
According to him, “If you contribute any money, the money in your RSA will be split into two; 40 per cent will go into contingency, 60 per cent for pension.
“The 40 per cent was done that way because an average informal sector participant will need money occassionally, so the 40 per cent contingency function can be used by an informal sector worker to settle their needs as they arise.”
The Head of Corporate Communications, PenCom, Ibrahim Garba Buwai, said, micro pension is about financial inclusion, providing a platform for savings so that workers can have something to fall back onto, especially in the time when they are no longer active.
He said, “The micropension takes care of the peculiarity of this particular sector in the sense that we know that they have ongoing needs. 40 per cent of their RSA is for contingency, meaning if you have needs, emergency, to pay medical bills, children school fees, you can withdraw from the RSA.”
During the event, PenCom had a raffle draw were participants won different prizes.
