Amaka Obiefuna

The President of Pension Operators of Nigeria (PenOp), Ronke Adediji says Micro pension, informal sector and tradition aggregators hold more potential to transforming the economy successfully than the banks.

Adediji, who stated this 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 significant role in Micro Pension as it generates jobs, amplifies entrepreneurial undertaking, reduces unemployment and underemployment, alleviates poverty and promotes economic growth.

She called on the National Pension Commission (PENCOM) to accelerate full implementation of micro pension scheme across the country, adding that to encourage contributions to the micro pension plan by the target audience, there has to 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.

The PenOp boss said full implementation of micro pension in Nigeria will boost the economy and reduce the level of poverty associated with informal sector and old age.

Adediji also 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.

She equally mentioned  allowing opt outs during periods when participants are not able to contribute, ensuring inexpensive portability, financial education, compulsory participation, centralized administration to lower administrative costs, professional management of funds, seamless and straightforward access to benefits.

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.