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Chuks Udo Okonta
The National Pension Commission (PenCom) has changed the name of the informal sector pension package – Micro Pension Plan (MPP) to Personal Pension Plan (PPP) in its repositioning strategy aimed at accommodating more contributors.
The Director-General of PenCom Ms. Omolola Oloworaran, said this yesterday at the Pension Industry Leaders’ Retreat in Lagos.
She noted that the plan will be relaunched with the new name in coming months.
The Micro Pension Plan was launched in 2019, with the aim of extending retirement benefits to workers in the informal sector who traditionally lack access to structured retirement savings.
Micro Pension Plan refers to an arrangement under the Contributory Pension Scheme (CPS) that allows the self-employed and persons working in organisations with less than three employees to make financial contributions towards the provision of pension for their retirement or upon incapacitation.
Micro Pension guarantees a secured future through steady income at retirement. It reduces old age poverty and the process is easy, simple and flexible. Under the Micro Pension Plan, all Associations, Unions, Cooperatives and Trades as well as the Professionals are covered and can participate in the scheme.
Who Can Participate?
Anyone over 18 years of age with a legitimate source of income in Nigeria can join the Micro Pension Plan, including artisans, the self-employed, members of associations, unions, cooperatives, trades, and operators of small and medium-sized businesses.
How Does the Micro Pension Plan (MPP) Work?
The Micro Pension Plan allows contributors to make daily, weekly, or monthly contributions through various channels, including cash deposits, electronic transfers, and other electronic payment platforms approved by the Central Bank of Nigeria (CBN).
Each contribution is divided into two parts:
1. Contingent Contributions (40 per cent):This portion is available for withdrawal to meet urgent needs. The first withdrawal can be made three months after the initial contribution and subsequently once a week.
2. Retirement Benefit Portion (60 per cent):This portion is reserved for retirement and can be accessed from age 50 or in the case of health issues.
Benefits of the Micro Pension Plan (MPP)
1. Financial Security in Retirement: The MPP helps combat old-age poverty by providing a steady income stream during retirement, ensuring financial stability and peace of mind.
2. Flexible and Affordable Contributions: Allows small, flexible contributions based on individual financial capacity, making it accessible to those with varying income levels.
3. Accessibility and Inclusivity: Designed for individuals in the informal sector and small business owners, the MPP is a flexible system that allows periodic contributions and withdrawals.
4. Growth of Savings: Contributors’ funds increase over time due to interest paid by Pension Fund Administrators from investments made with the funds.
How Can You Participate?
1. Formal Working-Class Individuals: While the MPP is not designed for you, you can purchase the plan for your domestic staff, vendors, family, and friends ensuring they have financial security for their future. You can also spread the word about this inclusive pension plan.
2. Informal Sector Workers (artisans, self-employed, small business owners): You can join the Micro Pension Plan (MPP), encourage your colleagues, and spread the word about this opportunity.
