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PenCom to encourage micro pension plan contributors with health insurance policy

THE National Pension Commission (PenCom) says it is strategizing to expand its micro pension plan (MPP) with a health insurance incentive for contributors in the scheme.

Pencom said the incentive was part of its strategy to get more Nigerians enrolled into the scheme.

The Commission disclosed it has simplified the documentation process for pensioners under the scheme to attract more people from the informal sector.

The Director-General of PenCom, Aisha Dahir-Umar, said these today in Abuja at a workshop for journalists.

The theme of the workshop, which was organised by the Commission, was, ‘Increasing Informal Sector Participation in the Contributory Pension Scheme: The case for Micro Pension Plan.’

President Muhammadu Buhari had on April 27, 2019 officially launched the MPP as part of his administration’s efforts at ensuring that Nigerians who had worked hard during their active years in service of their fatherland live in dignity and retire without any cause for alarm.

The MPP was initiated by the Pencom to incorporate workers in the informal sector of the economy.

Since the launch of the plan, over 72,846 contributors had been registered by Pension Fund Administrators (PFAs).

The MPP, which targets a significant majority of Nigeria’s working population who, incidentally, operate in the informal sector, was conceptualised to expand pension coverage to the informal sector, including small-scale businesses, entertainers, professionals, petty traders and artisans.

Dahir-Umar said the MPP was being implemented to curb old-age poverty by assisting workers to contribute while working and build long-term savings to fall back on when they become old.

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She said the theme of the conference aligned with the Commission’s objective of expanding coverage of the contributory pension scheme (CPS).

The aim, she added, was to bring into the CPS Nigerians working in the informal sector of the economy and those who are self-employed through the MPP.

She said, “It is of utmost importance to educate the media on the MPP and enlist your support to make the Plan popular among informal sector workers and the self-employed.

“The Commission is mindful of your critical role in disseminating factual information to its stakeholders. So, it is imperative to constantly interact and inform you of recent developments in the pension industry and some of the Commission’s significant activities.

“Strategic efforts to drive the Micro Pension Plan remain one of the important areas of focus of the Commission.

“To boost confidence in the participation of the MPP, the Commission is strategising to provide incentives such as health insurance.”

The Pencom DG also said that the Commission was implementing series of measures to improve the pension scheme, noting that a revised regulation on the ‘Administration of Retirement and Terminal Benefits’ has been issued to PFAs for immediate implementation.

The revised regulation mandates PFAs to make efforts to ensure that all documentation preparatory to the retirement of the account holder should be provided and concluded within a period of four months prior to the date of retirement.

She explained that the regulation guides the process of accessing retirement and terminal benefits by pension contributors and retirees under the CPS.

The revised regulation states that retirees shall be allowed to access additional lump sum after the payment of the initial lump sum provided that there are additional inflows of funds into their retirement savings accounts (RSA) from the employers.

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However, the additional remittances shall first be applied to augment the pension up to 50 per cent of the retiree’s final salary, while the balance may be paid out as a lump sum.



Where the retiree’s pension is already up to 50 per cent of the final salary, the retiree may choose to collect the entire additional remittances as a lump sum.

Where the additional inflow into the RSA of a retiree-on-retiree life annuity is not up to N100,000, the amount shall be paid directly into the retiree’s bank account, subject to the Commission’s approval.




     

     

    The Pencom DG said that to ensure strict adherence, the revised regulation is introducing administrative sanctions on PFAs who disregarded the provisions of the regulation.

    “The sanctions are to ensure that PFAs promptly process the payment of retirement benefits to retirees,” she added.

    Dahir-Umar disclosed that pension fund sssets had grown to N14.27 trillion by June 30, 2022.

    She reaffirmed the Commission’s commitment to creating awareness and holding social dialogue on the workings of the CPS with relevant stakeholders towards its smooth implementation in Nigeria.

    Harrison Edeh is a journalist with the International Centre for Investigative Reporting, always determined to drive advocacy for good governance through holding public officials and businesses accountable.

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