Lagos, March 30, 2023 Mr Ivor Takor, Director, Centre for Pension Right Advocacy, hss said that an improvement in the economy of the country was key to penetration of the Mirco Pension Plan. (MPP).Thank you for reading this post, don't forget to subscribe!
Takor said this in an interview with Naija247news on Thursday in Lagos.
Naija247news reports that the MPP was launched to the informal sector by President Muhammadu Buhari in March 2019 to cater for the pension needs of workers in the informal sector.
The step offers an opportunity to workers in the informal sector who cannot register for the Contributory Pension Scheme (CPS) designed for only workers in the public and organised private sectors.
According to Takor, the MPP, which is still at a growing stage, will thrive when the economy improves.
He explained that the scheme was experiencing low penetration because it was not compulsory for its targeted audience, unlike the CPS.
The director explained that most operators in the informal sector depend on their daily income for survival and following the current inflation and hardship in the country, they find it difficult to adopt a pension plan saving culture.
“The MPP is growing slowly because it is not compulsory. It is a voluntary scheme and will need time to penetrate the market.
“Our economy needs to improve and promote the scheme because inflation and hardship had generally affected the saving culture of the masses.
“Technically, it is a country whose economy is conducive that its people can spare from their excesses to save.”
According to him, government at all levels must strive to improve the economy so that people can save for their pension to ensure a better life at old age.
Takor noted that the informal sector, though vast and unorganised, remains a huge potential for the pension industry, if well harnessed.
Meanwhile, the National Pension Commission (PenCom), in its 2022 fourth quarter report released recently, stated that 89,327 informal sector workers registered under the MPP and contributed a total sum of N368.034 million into the scheme.
PenCom said that 4,715 Micro Pension Contributors (MPC) were registered during the period under review by 18 Pension Fund Administrators (PFAs), bringing the total number of registered participants to 89,327 as at December 2022.
The commission revealed that the total amount contributed by the mirco pension plan participants stood at N42,118 million at the end of the fourth quarter of 2022.
“This brings the total pension contributions received from 89,327 MPCs to N368,034 million as at Dec. 31, 2022.
“Stanbic IBTC Pension Managers Ltd., ARM Pensions Managers (PFA) Ltd. and Tangerine APT Pensions Ltd. registered the largest number of MPCs with 1,448, 1,205 and 1,065 respectively.
“Also, Norrenberger Pension, Crusader Sterling Pension Ltd., First Guaranty Pensions Ltd. had the least RSA numbers with 7, 4 and 3 respectively, within the quarter in 2022.