The National Pension Commission (PenCom) has informed that it would be redesigning the Micro Pension Plan to ensure that more people join the pension scheme, especially as majority of the working populace in Nigeria are in the informal sector.
This was disclosed on Tuesday in Lagos, at the 2025 Annual Conference of the Nigerian Association of Insurance and Pension Editors, with the theme, “Strengthening Insurance and Pension Frameworks for Better Economy.”
Micro Pension Plan is an arrangement under the Contributory Pension Scheme that allows the self-employed and persons working in organisations with less than three employees to make financial contributions towards the provision of a pension for their retirement or upon incapacitation.
Speaking at the conference, the Director-General, PenCom, Ms Omolola Oloworaran, who was represented by Head, Corporate Communications, PenCom, Mr. Ibrahim Buwai, averred that the majority of the Nigerian workforce was in the informal sector.
He said, “Let’s talk about this issue of expanding the Contributory Pension Scheme towards increasing financial inclusion to grow the informal sector. Even though the data out there of the Nigerian labour force says 70 million or 80 million, be that as it may, the consensus there is that the labour force out there largely resides in the informal sector.
“How do we bring the informal sector under the contributory pension scheme? It is even more important in a country like Nigeria, where the social safety net is not that strong. So, pension is what will come in handy in terms of providing that social safety net.”
The Micro Pension Plan was launched in 2019 by PenCom, but unfortunately, it has not gained much traction as it has only about 200,000 contributors registered under that plan with an asset of about a billion naira, which is very insignificant.
“What we are doing now is looking at totally redesigning that product. And in the next few weeks, we are going to come out with a newly branded micro pension plan now called Personal Pension Plan. We recognise the issues with the product. One of the key element of the product is that that product is going to be stratified into three strata, because we recognise that the sector is not micro. It does not only capture people who are down the ladder- the artisans and so on, it also takes care of people who are up there, the entertainers, the sportsmen who are doing a one man thing. These people need to be taken care of in the plan and there will be a section in the new plan for them.
“But the most important thing is to address the challenges especially around onboarding. I am happy because even the keynote speaker mentioned technology-enabled onboarding, so that is part of what we are looking at. We will put technology in place so that onboarding can be as simple as going to the POS to withdraw or lodge money,” Buwai said.
The PenCom spokesperson also disclosed that with the increase in FinTech, the regulators were considering adding a Super Agent who would come in and do the onboarding on behalf of the PFAs.
“This speaks to the issue that we need to license Micro Pension PFAs so that this model will enable us to achieve that purpose,” he noted.
Regarding the deployment of pension fund to economic development, PenCom said that it was one area it was focusing on.
“At the moment, we are renewing impetus to ensure that pension funds are invested in infrastructure, private equity etc. This is a two-pronged approach. Apart from the issue of economic development, we are also worried about the real return on investment for the benefit of the retirees and contributors. We are also aware that the recent inflation bite seems to reduce the real purchasing power and that is what is affecting the retirees also.”
