Micro pension product now selling

14 Jun 2019

The Nation

‘Micro pension product now selling’

Pension Fund Administrators (PFAs) have started selling micro pension product to workers in the informal sector, Pension Fund Operators Association of Nigeria (PenOp) President, Mrs Aderonke Adedeji, has said. This is coming five weeks after the launch of the scheme by President Muhammadu Buhari in Abuja. Speaking with reporters in Lagos, Mrs Adedeji, also the Managing Director of Leadway Pensure, said the PFAs, through the sales, have been enrolling workers into the scheme. She added that some issues were being ironed out to ensure that the scheme is seamless. Adedeji said: “The micro pension led by the industry regulator, the National Pension Commission (PenCom), has been launched. On whether we have started selling the product, the answer is yes. The industry has started selling and people have been enrolled into the micro pension scheme. “Having said that, there are still some operational issues that are being ironed out to ensure that the entire scheme is seamless. We also need to ensure that we learn from lessons and take advantage of the lessons that we learnt from the implementation of the Contributory Pension Scheme (CPS), particularly in terms of how we register people and the quality of data that we collect as operators. “This process is ongoing and that is perhaps why you have not heard much as you would expect to hear about the new scheme.

 

Presently, there is an ongoing dialogue between operators and the regulators and once all these issues are sorted out, there will be much more activity and publicity.” She said the fund is important to the nation’s development. “As a nation, about 14 years ago, we did not have any structured pension scheme and when the Pension Reform Act was enacted in 2004, it only covered the formal sector. Pension is a necessity in any nation because it is used to provide financial stability in old age.  Any nation that cannot look after its own people would weaken the entire fabric of the society. So micro pension is very significant. “Right now, it would be impossible to put a number to how much we have sold, but what I think is most important is the enlightenment and education that needs to go on. We want people to change their habit and imbibe savings culture. There’s a need for a lot of enlightenment and PenCom and the operators have embarked on enlightenment campaign. Even the formal sector took a lot of enlightenment for us to get to where we are now. So the key really would be a lot of publicity, enlightenment and a lot of engagement at all levels. “To make the scheme attractive, different incentives have been built into the scheme. For example, the ability to pay contributions any time you feel like it. Another incentive is that there is a contingent part of that contribution that would enable you to withdraw up to 40 per cent of your savings anytime you feel. These are some of the incentives built into it and like anything, it will evolve and as we gain experience I am sure that there will be more incentives that would be built in overtime,” she added.

 


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