- MPP Guarantees a Secured Future through Steady Income at Retirement
The Kaduna State Governor Nasir El-Rufai, represented by the
Permanent Secretary, Kaduna State Ministry of Business, Innovation and
Technology, Dr Yusuf Sale, officially opened the Fair. The Fair provided PenCom
the opportunity to interact and sensitise members of the public on its
functions, the workings of the Micro Pension Plan (MPP), and how the
Contributory Pension Scheme (CPS) operates for the benefit of workers and
retirees. The MPP targets the informal sector, comprising Micro, Small and
Medium Enterprises (MSMEs), private sector establishments with less than three
employees and self-employed persons such as footballers, musicians, actors,
painters and even lawyers and architects.
Section 2(3) of the Pension Reform Act, 2014 (PRA 2014)
permits employees of organisations with less than three employees and
self-employed persons to participate in the CPS. Accordingly, PenCom introduced
the MPP to cover persons in the informal sector.
Workers in the informal sector, many of whom attended the
Kaduna Trade Fair, constitute the vast majority of the working population in
Nigeria and are not covered by any retirement benefits scheme. Accordingly, MPP
refers to an arrangement to provide pensions to the self-employed and persons
operating in the informal sector.
PenCom showcased the benefits of the MPP as part of its
strategy to expand pension coverage to the informal sector. The MPP guarantees
a secured future through steady income at retirement, thereby reducing old-age
poverty. During the Fair, officials of PenCom interacted with participants and
educated them on the benefits of the MPP.
Other benefits of the MPP include the following:• Flexible
contribution remittance.• Achievement of economic stability objectives of
contributors and financial independence at retirement. • The option to withdraw
part of savings (40% of contribution) before retirement.
PenCom’s stand at the Trade Fair was operated by staff who
provided customer care services and clarified the workings of the CPS, with
emphasis on the MPP. Numerous visitors, including Retirement Savings Account
(RSA) holders, interested members of the public and students from various
schools, were hosted at the stand. PenCom publications, which included
Frequently Asked Questions (FAQs) on the CPS and MPP, were distributed to
participants at the Fair. Traders and visitors who thronged PenCom’s stand were
excited to learn about the MPP.
Enrolment into the MPP is simple and flexible. The minimum
age for registration under the MPP is 18 years. New MPP participants are
required to undergo registration with any Pension Fund Administrator (PFA) of
their choice. Registration involves opening an RSA by completing a registration
form.
Once the RSA is opened, the Micro Pension Contributor (MPC)
is issued a Personal Identification Number (PIN) by the PFA. Self-employed
persons belonging to a Trade, Profession, Cooperative or Business Association;
persons with a business name registration, partnership or enterprise; Employees
operating in the informal sector who work with or without formal employment
Contract; and Other self-employed individuals are eligible to participate in
the MPP. Such individuals must reside in Nigeria.
From inception to 31 December 2022, PFAs have registered
89,327 MPCs. Also, ₦368.03 million has been received as contributions from MPCs
from inception to 31 December 2022. The MPP membership is rising as more
informal sector participants realise the benefits of the Plan.
In conclusion, traders and artisans at the 44th Kaduna
International Trade Fair expressed excitement over the huge benefits of the MPP
under the CPS. PenCom highlighted the prospects of the MPP at the Kaduna Trade
Fair. The effective regulation and supervision of the pension industry in
Nigeria remain PenCom’s priority.