Though far off the figures projected before the inception in March 2099, the voluntary Micro Pension Plan is set on the foundation that the National Pension Commission is committed to build upon despite current trickling of contributions from the informal sector workers.
Micro pension plan, which PenCom created as the potential watershed of Nigeria’s pension fund contribution is lifting off the launch pad with unexpected low speed though, PenCom is not deflated by the total contribution which stood at N296.95 million as at 31st July 2022.
Projections before inception captured a potential of funds but three years down the line the registration level is pale. More than three years down the line registration by Pension Fund Administrators rest at 81,674 as at end of July contrary to initial projection of over 5 million anticipated at this period in the operation.
The level of contingent withdrawal showed that there is no run on the fund and, PenCom stats showed that N22.36 million were withdrawn by 118 micro pension contributors (MPC). As approved by PenCom, contingent portion could be withdrawn three months after the initial contribution and subsequently, once every week and should not exceed 40% of the contribution.
Another feature of the MPP is that it allows contributors to migrate to the formal contributory pension scheme and, within the period reviewed, 430 MPCs have converted from informal to formal and are now retirement savings account (RSAs) holders.
The Head, Micro Pensions Department, Dauda Ahmed explained while delivering paper on “The Micro Pension Plan: Bringing Financial Security at Old Age to the Doorsteps of the Informal Sector” that the Commission is watertight committed to MPP and has laced it with incentives to get the PFAs buy in.
Admitting that the traction is low not all PFAs are involved and enlightenment is still not at the level not enough to get to the target audience and reach the expected mass appeal.
Besides, Ahmed said the Commission is delaying another round of engagements with the informal sector until the it is satisfied it has assembled enough incentives to take back to the present contributors and potential contributors it eagerly want the PFAs to register and earn the traction that would win the investment nod of the board of other PFAs watching from the side-lines.