Pension

Micro pension contributions near N30m – PenCom

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Chuks Udo Okonta

Contributions from informal sector workers into the Micro Pension Plan (MPP) is now about N30 million, Inspenonline can report.

The Head, Research & Strategy Management Department, National Pension Commission (PenCom) Dr. Farouk Aminu, said this in a telephone conversation with Inspenonline.

Micro Pension Plan was launched on Thursday, March 28, 2019 by President Muhammadu Buhari in Abuja.

According to PenCom, Pension Fund Managers (PFMs) have invested N7.77 million out of the micro pension contributions as at February 29, 2020 in Federal Government’s treasury bills and bank placement, Inspenonline can report.

PenCom stated this in its monthly report, which detailed the summary of pension fund assets as at February 29, 2020. PenCom in the publication, also categorized micro pension contributions into Retirement Savings Account (RSA) Fund IV.

Giving a breakdown of how the 7.77 million fund were invested, PenCom said N3.10 million of the micro pension fund was invested in Federal Government treasury bills while N3.75 million went into bank placement.

According to PenCom, Micro Pension Plan (MPP) had recorded 28,000 subscribers as at October 2019.

The Acting Director-General, PenCom, Mrs. Aisha Dahir-Umar, said the Micro Pension Plan was designed to fit the peculiarities of the informal sector groups, adding that PenCom had extensively engaged all relevant stakeholders and obtained their inputs before the product was developed to suit their requirements.

She posited that the product is flexible with respect to contribution amount and the channel of remittance of contributions to the respective pension accounts, stressing that access to accumulated contributions is also flexible, seamless and facilitated by technology through varied payment system platforms.

According to her, a prospective Micro Pension contributor is required to open a Retirement Savings Account (RSA) by completing a physical or electronic registration form with a Pension Funds Administrator (PFA) of his/her choice, and the contributors may make contributions daily, weekly, monthly or as may be convenient to them.

She stated that every contribution shall be split into two, comprising 40 per cent for contingent withdrawal and 60 per cent for retirement benefits, adding that the contributor may, based on his/her needs, periodically withdraw the total or part of the balance of the contingent portion of his/her RSA, including all accrued investment income thereto.

The contributor, she said may also choose to convert the contingent portion of the contributions to the retirement benefits portion and the remaining balance in the RSA shall be available to the contributor upon retirement or attaining the age of 50 years.

“Pursuant to its regulatory and supervisory mandate, the Commission had established a separate Department dedicated to the supervision of all matters relating to Micro Pension Plan, including enforcement of compliance with the Guidelines and customer complaint handling and resolution. Our objective is to ensure efficiency and effectiveness in service delivery as well as transparency and accountability in the administration of the product by licensed pension operators,” she said.

She stated that guaranteed minimum pension will be given, provided the contributor made contributions for a cumulative period of not less than 120 months and the RSA balance at retirement shall not be less than N500,000.

She maintained that the plan is expected to significantly expand pension coverage to greater number of Nigerians and further generate additional long term funds for Nigeria’s economic development, adding that the Commission would collaborate with relevant stakeholders to sensitize and enlighten the target participants and members of the public on the features and benefits of the Micro Pension Plan.

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