The Federal Government of Nigeria has given approval to the Micro Pension guidelines, expected to take off by January 2019.

The Head, Research & Corporate Strategy, PenCom, Dr. Farouk Aminu who confirmed the approval at the 2018 Media Retreat organised by Pension Fund Operators Association of Nigeria (PenOp) for Pension Correspondents in Lagos, said with this approval, the commission was working on ensuring that the scheme commenced in January, 2019, noting that it was a development that could enhance the growth of pension assets in the country.

The approval, it was learnt, was communicated to the National Pension Commisson  (PenCom) through the Secretary General of Federation (SGF) on Wednesday.

Aminu said the commission is currently working on the ICT infrastructure to support the implementation and to ensure effective take off of the plan, confirming that  the micro pension will be voluntary and that there will be a lot of flexibility in the plan to allow it to work.

He stressed that the contributor would decide whether  to be contributing daily, weekly, monthly or quarterly, adding that the contributor will have access to 40 per cent of his contributions, while 60 per cent will be locked in as Pension, and can only be withdrawn when the contributor retires.

According to him, there will be no bottleneck in collecting the money when the retiree wants it, because PFAs will handle all approvals unlike the normal one that all approvals will come from PenCom.

Aminu said the micro pension plan is a scheme meant to capture people in the informal sector of the economy and expand the outreach of the new pension scheme.

PenCom, had earlier projected that the scheme if it finally takes off, has the potential to generate about N3 trillion to the pension assets, while Pencom intends to mobilize about 12 million contributors within five years.

Micro Pension plan, according to PenCom, is expected to capture 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 especially pension plan.

PenCom’s Acting Director-General, Mrs. Aisha Dahir-Umar, stated that the implementation of the Micro Pension Plan was expected to improve the standard of living of the informal sector participants at retirement and reduce dependence on extended family for support at retirement.

The Executive Secretary, PenOp, Ms. Susan Oranye, said though the pension funds has grown to N8.2 trillion and the number of contributors has risen to about 8 million, the huge population of 160 million shows a lot of potential exist in the pension industry.

She explained that the micro pension scheme would explore the potentials in the pension industry by persuading players in the informal sector to join the Contributory Pension Scheme(CPS) through the micro pension plan. More people subscribing to the plan she said, wiill increase the pension assets, allowing pension fund operators to invest more funds for economic growth and development.

However, the Head, Corporate Communications, PenCom, Peter Aghahowa said the  regulator and operators are jointly working on the I.T infrastructure to ensure a seamless operation of the plan.