Experts decry low uptake of micro pension, charge PFAS on penetration

SOME pension industry stakeholders have called on Pension Fund Administrators (PFAS) to adopt new strategies to deepen Micro-pension Plan (MPP) awareness to attract more Nigerians into the scheme.

MPP, in line with the guided provision of PRA 2014, the National Pension Commission (Pencom), was intro¬duced with the objective of boarding pension coverage to include workers in the informal sector. Under the MPP, private sector organisations with less than three employees and selfem¬ployed individuals in the economy, who comprise over 87.9 per cent of working-class citizens, can participate in the contribution pension scheme (CPS).

The stakeholders are concerned about the slow pace at which the scheme is going, since launched in 2019 by the immediate past president, Muhammadu Buhari. They said only 105,455 contributors have so far subscribed to the scheme and contributed N435.61 million in five years, representing an average contribution of N108.9 million yearly.

Speaking on this development, Managing Director, IEI Anchor Pension, Glory Etaduovie, urged pension managers to craft a new strategy to drive acceptance of MPP among Nigerians, as a channel that can be applied to also drive financial inclusion. Head, Surveillance Department, at the National Pension Commission (Pencom), Ehimeme Ohioma, recently revealed that the total contingent withdrawal by MPP contributors amounted to N30.3 million while there was an increase in the conversion from the informal sector to the formal sector, amounting to N6.5 million, involving 587 Retirement Savings Account (RSA) holders. Despite the slow pace with which the plan is running, the commission is hopeful that the initiative will contribute to economic growth by offering a reliable income source for pensioners and reduce dependence on others in old age, thereby lowering poverty rates as the objective of the scheme is to cultivate a savings culture among lowincome earners and selfemployed individuals. Explaining some of the problems preventing the scheme from rapid growth, Head of the Micro Pensions Department, Dauda Ahmed, said several implementation challenges faced include poor awareness, mistrust, insufficient incentives, low financial literacy, inadequate service delivery, poverty, slow adaptation of the scheme, issues relating to benefits payout, the need to simplify document requirements during registration and inflation.