Micro pension plan recorded N296.957m from 81,674 contributors ― PenCom

Nigeria’s Micro Pension Plan (MPP) has attracted 81,674 contributors with a total contribution of N296,957,107.11 in the second quarter (Q2) of 2022, according to data released by the National Pension Commission (PenCom).

Also, 118 Micro Pension Contributors (MPC), made total contingent withdrawals of N22,363,726.87, while 430 Retirement Savings Account (RSAs) holders converted from the informal to a formal plan, reflecting a total sum of N4,934,634.93 during the period under review.

The micro-pension scheme, which was launched in 2019 set out to extend the reach of pension to the self-employed and employees of organisations with a minimum staff strength of three, in a bid to provide cover for 30 per cent of the national workforce by 2024.

However, three years after its official launch by Mr President Muhammadu Buhari in March 2019, the goal of the MPP seems to be far from being accomplished due to a number of factors already identified by the Commission.

According to PenCom, insufficient awareness of the Micro Pension Plan by Informal Sector workers and lack of adequate incentives to encourage participation have thwarted the scheme’s growth.

It added that different competing products in the market with more flexibility towards access to funds, such as thrift savings, daily collections, etc., are some of the impediments.

“Negative perception/trust deficit stemming from the experience of Nigerians on pension administration under the defunct defined benefit scheme; non-adoption of shared services arrangements, which results in high infrastructure setup cost for PFAs to drive MPP nationally,” were also identified as some of the drawbacks to the plan.

The National Pension Commission also pointed out that COVID-19 and the slowdown in economic activities affected the full participation of the target group in the scheme.

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