By ZAKA KHALIQ, Lagos
There are indications that the Micro Pension Scheme expected to generate about N3 trillion within five years of its take off may suffer a major set back, as most trade unions in the informal sector who are the target of this initiative have decided not to join the scheme until certain conditions are met.
LEADERSHIP gathered that because the demands of the trade unions in the informal sector are too outrageous, the scheme might not take off in the next eight years if these players still maintain their stand.
Micro pension is a scheme targeted at self-employed people, especially those with irregular income usually in the informal sector and are largely financially uninformed with limited or no access to financial services like pension plan.
This segment, which is estimated to be 70 per cent of the country’s population, largely exists in Nigeria as artisans and self-employed persons.
Our investigations revealed that at different stakeholders’ meetings organised by the National Pension Commission (PenCom) to lobby artisans to subscribe to micro pension, most trade unions were demanding that the Commission should provide working tools for their members as part of the requirements to join the micro pension scheme.
The commission, it was learnt, disagreed with this demand, stating that PenCom, as a regulator, does not have the capacity under the law that establishes it to fulfill such demand.
To this end, most of the trade unions are unwilling to subscribe to the scheme until their demands were met.
A credible source in the pension industry who confided in LEADERSHIP said, “For instance, the association of tailors and fashion designers is demanding that PenCom should buy sewing machine to its members to be part of the scheme. This is beyond the purview of the commission”.
Moreover, with the promoter of the scheme and former Director General of PenCom, Mrs. Chinelo Anohu-Amazu, no longer in the commission, it remains a hilly task to kick-off the scheme.
Meanwhile, LEADERSHIP gathered that players in the Nollywood industry and law profession, which are expected to be under this scheme as well, objected to the name ‘Micro Pension’, calling for change of name before they could subscribe to the scheme.
This entails that the scheme may require a total rebranding to cajole more people to subscribe to it.
If the scheme finally takes off, it will generate about N3 trillion to the pension assets, while mobilising about 12 million contributors within five years.
Highlighting the challenges of the scheme, Chief Executive Officer of Stanbic IBTC Pension Managers Limited, Mr. Eric Fajemisi, said although micro pension scheme is good for the country, it has challenges.
These challenges, according to him, include insufficient awareness and negative perception towards it, modest financial literacy in the country, high cost of promoting awareness on the Contributory Pension Scheme (CPS), lack of reliable data on the informal sector and low buy-in by unions in the pension sector, among others.
These challenges, he noted, must be addressed prior to the commencement of the scheme and thereafter.
Fajemisi said on the other hand, the micro pension scheme, when finalised, would ensure improved standard of living for the elderly, guarantee the safety of funds and may provide access to other incentives such as mortgage facilities and health insurance.
He listed other benefits to include flexible contribution remittances, the opportunity to make withdrawal prior to retirement and the enhancement of financial inclusion and attainment of economic stability objectives.
He described the proposed micro pension scheme as having the capacity to deepen asset accumulation in Nigeria, which will also provide the vital capital required for investment in critical sectors of the economy.
Head of Micro Pensions Department of PenCom, Mr. Polycarp Anyanwu, had said the micro pension scheme is expected to help boost the pension contributors to 20 million Nigerians by 2019 and 30 million by the year 2024.
Anyanwu added that micro pensions directly addresses breakdown of family support, averts old age poverty as it engages and extends pension to the large working population that are self-employed.
He said PenCom’s target is the self-employed in various trades and professions in Nigeria – artisans, accountants, lawyers, mechanics, tailors, market men/women, hair dressers, architects, engineers, among others.
All rights reserved. This material, and other digital content on this website, may not be reproduced, published, broadcast, rewritten or redistributed in whole or in part without prior express written permission from LEADERSHIP Nigeria Newspapers. Contact: [email protected]
ENTERTAINMENT24 hours ago
Ras Kimono’s Wife, Efemena, Dies 3 Months After Husband’s Death
NEWS20 hours ago
Obaseki Approaches PMB, Seeks official Pardon For Late Ambrose Alli
NEWS23 hours ago
Osun Poll: Alteration Of Result Will Lead To Anarchy – Atiku
NEWS6 hours ago
11 APC Aspirants Jostle For Governorship, 7 For Senate In Nasarawa
OPINION5 hours ago
The Multiple ‘Sins’ Of Governor Yari
POLITICS9 hours ago
APC Queries BoT Member For Attending PDP Rally
COVER STORIES11 hours ago
PDP, APC Knock INEC Over Inconclusive Osun Guber Poll
NEWS10 hours ago
N’Delta Youths Commend Bichi’s Appointment As DG DSS