The National Pension Commission (PenCom) has said that pension funds will be upped by N3 trillion from the current N8.45 trillion as a result of the micro pension plan.
PenCom also said the plan would contribute about twenty million participants into the contributory pension scheme (CPS), and that everything was ready for the formal commencement of the plan nationwide.
This prospective addition, alongside the N100 billion contribution made by pension contributors in October 2018 will help further boost pension funds.
Peter Aghahowa, the Head of Corporate Communications in PenCom, said that they, with the help of pension fund operators, have created a sturdy Information Technology (IT) infrastructure that would assist the micro pension plan. He explained,
“The Commission have also had engagements with informal sector groups such as the Nigerian Union of Textile, Garment and Tailoring Workers of Nigeria (NUTGTWN) – a body consisting of self-employed tailors and garment workers – partner trade associations, non-Governmental organisations (NGOs) and religious bodies in a bid to persuade them to subscribe to the micro pension plan.”
The establishment and future contribution of the micro pension plan to pension funds is great timing seeing at the end of the second quarter of 2018, N151.95 billion of pension funds was invested in State Governments’ securities.
What you should know about micro pension
Micro pension plan, in accordance with the provisions of Section 2(3) of the Pension Reform Act 2014, is a plan for the self-employed and persons working under the informal sector. Its framework was drafted by PenCom in May 2018.
This pension plan is not mandatory. An eligible person may choose to register under the plan by opening a Retirement Savings (RSA) with a Pension Fund Administrator (PFA) of choice and provide the required documentation as specified by the PFA.
About the Contributory Pension Scheme
The Contributory Pension Scheme was established under Section 3(1) of the Pension Reform Act, 2014. It is an arrangement where both the employer and the employee contribute towards the payment of the employee’s pension at retirement.
It is fully funded through the monthly pension contributions that are remitted into an employee’s Retirement Savings Account (RSA), managed by a Pension Fund Administrator.