The National Pension Commission (PenCom) has mandated Pension Fund Administrators (PFAs) to invest all pension contributions under the Micro Pension Plan (MPP).
Micro Pension Plan is an arrangement under the Contributory Pension Scheme (CPS) that allows the self-employed and persons working in organisations with less than three employees to make financial contributions towards the provision of pension at their retirement or incapacitation.
The commission assuring the launch of the plan before the end of the first quarter of 2019, said the income from the investment activities will be credited into the Retirement Savings Accounts (RSA) of the contributors.
However, to be eligible for the plan, the commission said you must be a Nigerian, not below 18 years of age; have a legitimate source of income; belong to trade association or profession; and may be self-employed or an employee of an organization with less than three employees with or without a formal employment contract.
PenCom added that the plan which is easy, simple and flexible will secure the future through steady income at retirement and reduce old age poverty and has been approved by the Central Bank of Nigeria (CBN).
“It is dependent on the Contributor’s pension aspiration and financial capacity. Thus, higher contributions will result in more money available for pension.”
“Contribution under the Micro Pension Plan can be made by cash deposit or electronic transfer through any payment platform, or other financial service agents approved by the Central Bank of Nigeria (CBN),” PenCom said.
Meanwhile, reports show that Ghana, Kenya and India have adopted the micro pension plan for workers in the informal sector of their economy.