Pencom Set to Enforce Pension Remittances, Targets Informal Sector Operators

The National Pension Commission (PENCOM) is taking bold steps to enforce remittances of pension deductions by employers and to widen its public awareness of the Micro Pension Plan (MPP) in other to encourage participation among operators of the informal sector, in the country.

Mr. Dauda Ahmed, the Head of Micro Pension Department, said in Abuja, that MPP was a veritable tool against poverty at old age, which he observed has been the worst challenge of people employed in the informal sector.

Ahmed,  spoke on, “The Micro Pension Plan: Bringing Financial Security at Old Age to the Doorsteps of the Informal Sector,” at the 2022 workshop for journalists.

Ahmed said, “MPP is the solution to old age poverty. This is a pension plan in which contributions are so flexible that they are done at one’s pace so that those engaged in the informal sector can have something to fall back on when they are old.

“MPP is voluntary and will improve the standards of living of the elderly, as it provides a regular stream of income of benefits at old age.”

According to Ahmed, Pencom recognized that the income of those employed in the informal sector was irregular and that as such the MPP has been designed in a simplified way such that its contributions also had a leeway to make contributions when they have income.

He explained that MPP has been structured into two with 60 percent of the contributions going into the retirement benefit and the 40 percent going into a contingency account.

He added that the 40 percent contingency segment could be drawn down at will, within two days of request, once the contributor had maintained the account for at least three months.

He revealed that based on the extent of provisions of the Pension Reform Act, it was not possible to convert an account of a formal sector contributor to an informal one but that the provision could be reviewed in favour of those who would be interested in migrating to the informal sector accounts

In his presentation, the Head, of the Benefits and Insurance Department, Mr. Obiora Ibeziako, said that contributors had two options Programme withdrawals from their Retirement Savings Accounts or Annuity.

According to Ibeziako, the current pension administration has been designed to ensure a better quality of life in retirement and therefore urged members of the public to take advantage of it.