PenOp Provides Recipe for Successful Micro Pension Scheme

EbereNwoji
As the National Pension Commission (NAICOM) prepares grounds for the implementation of the micro pension scheme which will enable the informal sector operators participate in the Contributory Pension Scheme, the Pension Fund Operators Association(PenOp) has recommended steps to be taken to encourage participation by the targeted audience.

PenOp Chairperson, Mrs Ronke Adedeji, who gave the recommendation at the third conference for insurance and pension organised by the National Association of Insurance and Pension Correspondents (NAIPCO) in Lagos recently said, “flexibility of contribution amounts, access to contributions/savings, incentives for participants, financial/pension education, coverage of a high proportion of the population, and availability of infrastructure that is supportive of mass registration.”
Other conditions recommended by her included flexibility in collection of contribution, and database management, easy and straightforward access to benefits among others.

She described micro pension scheme as an imperative scheme with urgency, saying this was because by its nature, it is a scheme with increasing longevity, a scheme which potential patronisers are mainly large and relatively young population with enough potential to reduce poverty and raise standard of living, a scheme with changing culture/diminishing family support, as well as a scheme which potential customers are characterised by growing size and mainly from informal sector market with high potential to transform the economy.

She defined micro pension as an arrangement for the provision of pension and retirement benefits to the low income, self-employed and persons operating in the informal sector, adding that it protects the low income members of the society against the vagaries /unpredictability of old-age poverty.
“The formulation of such schemes requires a delicate balance between economic viability, generation of adequate returns and customised features for the participants,” she stated.

According to her, for the scheme to succeed, there is need to properly address administrative, design and efficiency issues.
On strategies to encourage engagement in micro-pension plans, Adedeji, said there is need for awareness creation, need for provision of incentives to participants as well as need to encourage contribution of small frequent amounts.
She also suggested that contribution rates should be flexible with convenient door to door collection of contributions encouraged as well as insulation of the participants against volatility in investment growth.

She further said operators of the scheme should leverage on technology to facilitate easy contribution/payments.
Section 2(3) of the Pension Reform Act 2014, paved the way for micro pension scheme, stipulating that employees of organisations’ with less than three employees as well as self employed are entitled to participate under the scheme in accordance with guidelines issued by PenCom.
This group covers the informal sector which plays an indispensable role in Nigeria and world economies.

PTAD Commences Payment of Nigeria Re Pensioners’ Benefits
No less than 284 pensioners of the Nigeria Reinsurance Corporation (Nigeria Re) have been enlisted in the payroll of the Pension Transitional Arrangement Directorate (PTAD) for monthly payment of their retirement benefits.
This is coming 16 years after the federal government privatised the corporation.
A statement from PTAD said already, the agency had paid a total of N8.31 million to the above workers for July 2018, as a start for onward receiving of their monthly pension for life.

Commenting on the development, the Executive Secretary PTAD, Sharon Ikeazor, said that retirees would no longer be exposed to delayed pensions benefits.
“Today, Nigeria Reinsurance pensioners verified by PTAD Nigeria have been placed on monthly pension payroll. It is indeed a promise kept,” she stated.
She thanked the PTAD team for dedication and determination to fulfil the mandate of the Directorate and pledged government’s commitment to pensioners’ welfare.
She also assured pensioners that the backlog of outstanding pension arrears will be cleared as funds are allocated and released.