by Samuel Itsede
Moves to accommodate millions of Nigerians in the informal sector of the economy has seen President Muhammadu Buhari launching a micro pension plan.
In the new pension scheme, the government is expected to enlist traders, farmers and other entrepreneurs in various cottage industries most of whom will be at liberty to contribute to their retirement plan either daily, weekly or monthly.
Recall that since 2004 when the pension sector began to witness reforms, Nigerians in the informal sector were completely excluded from the different pension programs in existence.
Buhari while unveiling the policy, on Thursday, in Abuja, seized the forum to recommit to pension reforms, saying the dignity of public servants, who worked tirelessly and sacrificed for the greatness of Nigeria, will be restored despite lean resources.
He said retired public servants deserved better treatment and effective service that meets their needs to carry on after retirement, promising to remove the “rot within the pension system’’.
“The dignity of retired public servants who sacrificed their lives for this country will be restored. We will ensure all hard working Nigerians in the private sector, both formal and informal, can retire without fear,’’ he said.
The President noted that the Federal Government will continue to support the National Pension Commission to ensure a successful roll-out of the Micro Pension Plan, which will capture citizens that are not fully captured in the formal corporate sector.
“In addition to this program, we are also working tirelessly to sanitize some of the rot within the pension system we inherited. I want to assure all Nigerians that this government remains committed to resolving all pending issues on pension payment in the federal public sector despite the lean resources of Government, ”President Buhari added.
He said trade associations, unions, non-governmental organizations and other stakeholders in the informal sector should join hands with the government and pensions industry to enlighten their members and the general public on the benefits of Micro Pension Plan.
“Today, millions of traders, farmers and other entrepreneurs in various cottage industries are completely excluded from the different pension programs in existence.
“The Micro Pension Plan is the natural next step. The program guarantees that when these hard-working citizens retire, they can still live in dignity and comfort,’’ he said.
As part of efforts to diversify the economy and create a more inclusive and enabling environment for all Nigerians, President Buhari said the government has provided grants, concessionary loans and technical support through Small and Medium Enterprises clinics to farmers, traders and SMEs.
Secretary to the Government of the Federation, Boss Mustapha, at the event, said the new scheme will provide more security for Nigerians in the informal sector, and expand the country’s pension coverage as well as boost the economy.
“This scheme also benefits the government because it has the potential to generate a pool for investible long term funds that can drive economic development, ”he said.
Acting Director-General of National Pensions Commission, Aisha Dahir–Umar, said the Contributory Pension Scheme had recorded huge success since it was launched in 2004, with the formation of long term domestic capital, represented by N8.7 trillion worth of pension assets as at January 2019.
She said N6.51trillion representing 73 percent of the total pension assets have been invested in Federal Government securities issued to finance various activities.
According to her, N95.31billion of the funds have also been invested in infrastructure while N7.19billion have been invested in the N10.67billion Green Bond issued by the federal government.
Aisha explained that the funds belong to 8.46million formal sector participants. She said the Micro Pension Plan launched by the President targets a significant majority of Nigerian working population who operate in the informal sector. “Micro Pension Plan is designed to fit the peculiarities of these informal sector groups. The National Pension Commission has issued a robust guideline on micro pension plan to the provision of section 2(3) of the pension reform act 2014. “The product is flexible with respect to contribution amount and the channel of remittance of contributions to the respective pension accounts. Access to accumulated contributions is also flexible, seamless and facilitated by technology through varied payments system platform, “Aisha noted.
