Nigerian pension industry officials are concerned about the slow pace of informal sector enrollment in the country’s micropension schemes (MPPs) and are considering viable models in countries such as Rwanda and Kenya.
They believe that the lack of key incentives such as co-contribution and free healthcare found in other countries and insurance found in micropension schemes makes the Nigerian model unattractive to potential subscribers. there is
In this vein, the industry, including regulators, the National Pensions Commission (PenCom) and Pension Fund Administrators (PFA), are planning to review plans and find ways to make them more attractive to subscribers. recently stopped an awareness campaign.
As of the end of March 2023, the MPP has registered 93,225 participants in the informal sector, according to PenCom data.
In October 2018, the Rwandan government launched the social security scheme “Ejoheza” (microannuity product) for the informal sector in several districts, and within two weeks more than 30,000 people were enrolled and 2,000 people were enrolled. Earned long-term savings of over 10,000 Rwandan francs.
To motivate voluntary participation and continuation, EjoHeza offers attractive financial incentives such as matching co-pays and free term insurance coverage for the first three years.
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Speaking alongside a one-day workshop for journalists hosted by the Commission in Lagos, Abdulkadir Dahir of Pencom’s corporate communications department said the Commission was aware of the slow pace of MPP registration and said the MPP registration system said that it was decided that it was necessary to review product.
Co-funding in Rwanda and Kenya, he said, makes unique schemes attractive to informal sector workers, but what such policies mean for the Nigerian government at a time like this. expressed concern about
“We also considered the idea of co-funding with other incentives, although it would be an extra burden for the government.”
“The Joint PenCom/PenOp Committee will come up with practical measures to successfully promote the implementation of the MPP, which we are already working on,” he said.
Dawda Ahmed, head of micropensions aPenCom, said efforts are being made to institutionalize some incentives, which will help encourage more of the informal sector to accept micropensions, and the He said it would ensure that people in the sector had access to pension schemes and that their needs would be met. For old age after retirement.
He said Pencom is working towards introducing a minimum level of health insurance for eligible MPP participants as part of its incentives to accept micro-annuities.
Ahmed said the commission is also working with trade unions, industry associations and some bodies on accepting the plan.
Mr. Ahmed listed the challenges involved in implementing the plan. Lack of awareness, mistrust of pension systems, lack of appropriate incentives, lack of financial literacy.
As of the end of fiscal year 2022, ARM Pension Managers Limited, Stanbic IBTC Pension Managers Limited, and Pension Alliance Limited have joined other pension fund managers in enrolling in the Micro Pension Plan (MPP). (PFA).
Of the 89,327 registered subscribers (contributors), ARM Pension topped with 22,580 (25.25%) followed by Stanbic IBTC Pensions with 14.962 (16.75%).
Pension Alliance Limited and Tangerine APT Pensions Limited ranked third and fourth with 7,148 and 7,011 respectively, according to data from the National Pension Commission (PenCom).
The micropension scheme was launched in March 2019 as part of President Mohammadu Buhari’s second term election promises.
Retirement Savings Accounts (RSA) under Contributory Pension Plans (CPS) were projected to grow from 8.5 million at the time to 20 million in five years.
Four years later, however, RSA donors have risen slightly to 10 million, leaving MPP with just 93,225 RSA holders at the end of March 2023.
Established under the provisions of Article 2(3) of the Pension Reform Act 2014, MPPs are designed to encourage informal sector participants as informal sector workers make up the majority of the informal sector workforce. The aim is to enable people to save for their old age. Country.
