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Published On: Wed, Aug 22nd, 2018

PENOP calls for full implementation of Micro Pension

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From Ngozi Onyeakusi, Lagos

Pension Operators of Nigeria (PenOp) has advocated full implementation of micro pension scheme across the country.
PenOp described Micro pension, informal sector and tradition aggregators as holding more potential to transforming the economy more successful than the banks.
The PenOp President, Ronke Adediji, while speaking on the topic, “Exploring the Micro Pension Concept.” at the 3rd Annual Conference of the National Association of Insurance and Pension Correspondents (NAIPCO) in Lagos, observed that Informal Sector, plays significance role in Micro Pension as it generates jobs, amplifies entrepreneurial undertaking, reduces unemployment and underemployment, alleviates poverty and promotes economic growth.
Micro Pension is an arrangement for the provision of Pension and Retirement Benefits to the low income, self-employed and persons operating in the informal sector. It is a protection against the vagaries and unpredictability of old-age poverty..
To encourage contributions to the micro pension plan by the target audience according to her, needs flexibility of contribution amounts; access to contributions/saving; incentives for participants; financial/pension education; coverage of a high proportion of the population.
Others are availability of infrastructure that is supportive of mass registration; contribution collection and database management flexibility as well as easy and straightforward access to benefits.
PenOp boss listed creation of awareness, provision of incentives to participants, encouraging the contribution of small frequent amounts, flexible contribution rates, convenient door to door collection of contributions, and insulation of the participants against volatility in investment growth and leveraging technology to facilitate easy contribution/payments as key strategies to encourage engagement in micro-pension plans.
Others, according to her, include allowing opt outs during periods when participants are not able to contribute, ensure inexpensive portability, financial education, compulsory participation, centralized administration to lower administrative costs, professional management of funds, seamless and straightforward access to benefits.
She said micro pension is a key policy issue in developing countries and it should be considered imperative in Nigeria, adding that “Over 90% of the population in Sub Saharan Africa and South Asia are not covered by any pension arrangement due to general unemployment, low incomes, poor saving culture and above all pension arrangements that only favor workers in the formal sector”.
She called on full implementation of micro pension in Nigeria, as according to her, will boost the economy and reduce the level of poverty associated with informal sector and old age.

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