Everyone deserves to RetireWell

18 Sep 2019

Hello everyone, SAMI is here again.  I recently met Ada, a new financial mentee to discuss retirement planning. Ada is a successful sole proprietor/entrepreneur who imports souvenirs & executes branding needs for the large corporate clientele. The business is very capital intensive and she often has to plough most of her capital & profit back into the business.  Besides, earnings are cyclical and she had not considered making a conscious effort to set any savings aside towards retirement.

Does this sound familiar? Unfortunately Ada’s situation is not new, whilst retirement savings for individuals in formal employment (such as yourself) has been addressed through the mandatory contributory pension scheme, the informal sector employees (like Ada) were not covered by any structured pension savings. Well, the good news is that the Micro Pension Plan has now been established, this extends pension benefits to the categories of workers not covered by the already existing mandatory pension scheme as we know it. 


Here is how the Micro Pension Plan can help Ada Retire Well;


1. The Micro Pension Scheme enables organizations with less than 3 employees, self-employed individuals and other workers in the informal sector to contribute voluntarily towards retirement. Interestingly, this scheme can help Ada save towards retirement from the income generated from her new business.


2. The Micro Pension Scheme allows more flexibility in contributions with respect to frequency and amount saved. All these are fully within the control of the contributor. As such, Ada can choose to contribute daily or weekly. She can also add as much money as she wishes. This is a departure from the existing scheme which is for employees in formal employment who must contribute 8% of their housing, basic & transport allowance, while the employer contributes 10%.

 3. Enrolment into the micro pension scheme is straight forward. Just provide your BVN & NIN, valid means of identification and employment letter or evidence of membership of an association or Certificate of Incorporation (for the self-employed) and you qualify to be enrolled into the scheme.

 4. Another unique feature of the micro pension scheme is that every contribution made is split into two: 40% for contingent withdrawal and 60% to be available at retirement. This way, the 40% could be a reliable lifeline for a contributor in case of any immediate need of fund. For instance, Ada may choose to withdraw the 40% portion of her pension for urgent financial needs to scale her business and withdraw the balance whenever she chooses to retire.

 5. Furthermore, in the instance of a contributor’s death, the entire savings with the accrued interest will be available for withdrawal by the contributor’s beneficiary.


Now Ada understands that making contributions towards retirement is no longer limited to individuals within the formal sector, it means her celebrity friends (actors & musicians) and their domestic staff (drivers, nannies etc.) who, due to the nature of their occupation, had been excluded from the mandatory contributory scheme are now eligible through the Micro Pension Scheme. Ada has signed up to this plan and is spreading the word so others can benefit.Be like Ada, please help spread the word as Stanbic IBTC Pension Managers is fully ready to onboard contributors on their RetireWell, Micro Pension plan. 

To learn more about Stanbic IBTC’s RetireWell Micro pension Plan, please reach me via speaktosami@stanbicibtc.com


Till next time.


SAMI, your financial mentor



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