PenOp’s Open Day harps on informal sector embracing micro pension

…As CBN acknowledges role of pension in financial inclusion

Stakeholders in the nation’s financial sector of the economy have been urged to concentrate more efforts in activating plans and strategies capable of helping in deepening the pension fund industry considering the crucial roles of pension in achieving bigger band for financial inclusion in the country.

Head of Financial Inclusion department of the Central Bank of Nigeria (CBN) Mr Paul Oluikpe who made the call in Lagos said that recruitment of more Nigerians especially those in the informal sector into the micro pension basket represents a sure way of including more Nigerians into the financial systems in view of the multiplier effects of the scheme.

Mr Oluikpe who sent in a visional goodwill message from Abuja to the 2023 Micro pension Open Day organized by Pension Fund Operators Association of Nigeria (PenOp) noted that it was for good reasons that CBN has adopted pension sector as a critical arm of its financial inclusion drive.

“An average Nigerian must have one form of pension scheme or the order; formal or informal. Micropension has been helping us to include more Nigerians in the financial safety net. The seven per cent penetration level of pension in Nigeria as opposed to the 40 per cent projection is an indication of the huge potentials in the sector and this must be harnessed. Micro pension can be made a big deal in Nigeria”, he said.

It is consequent upon this that Mr Oluikpe challenged pension fund operators to be more creative in the area of product designs as to introduce products which holds multiple benefits as to serve as an anchor in attracting more into embracing the scheme.

According to him, the era of one size fits all in consumer engagement is gone thus making room for operators to be more ingenious in their product designs.

“We have to sufficiently target specific segment of the society with varying needs meaning that operators must remain innovative and creative with service and products. We need to rethink our old ways”, he insisted.

The PenOp’s Open Day initiative is intended to create a platform for pension fund operators to engage with members of the public with particular emphasis on the informal sector who are the primary target of the micro pension scheme. Members of the various trades groups which include fashion designers, mechanics, cooperative societies, hairdressers, commercial vehicle operators and related market associations participated in the Open Day programme which held at the Oriental Hotel, Victoria Island Lagos.

Mr Dauda Ahmed who is of the micro pension department of the National Pension Commission (PenCom) who spoke at the event said that efforts are been made to institutionalizing some incentives which will help in attracting more of the informal sector to embrace the micro pension project which sole aim is to ensure that those in the informal sector have pension arrangements which will cater for their old age as opposed to the current situation where the elderly do not have any form of retirement scheme except for those who retire from the formal sector.

According to him, efforts of the pension fund operators are beginning to yield results as more of the artisans are now subscribing to the micro pension programme. He revealed that a total of 95,450 people have registered in the micro pension as at the end of April this year with a total managed assets of N435.6 trillion.

To encourage new entrants he said, operator must device means of overcoming the issues of low level of awareness, poor remittances and the absence of innovation in product and service designs.

Mr Oguche Agudah who is the Chief Executive Officer of PenOp said that the best way to appreciate the relevance of the micro pension scheme as been implemented by pension fund operators is to wonder what will happen in the next 20 to 30 years to those in the informal sector who do not have any form of retirement programme.

“Those working in the informal sector, who do not have any form of pension or savings to fall back on; who would meet their needs when they retire? Will they rely on their children or government or still be working? We in the pension industry work to get many informal sector workers as possible on a pension scheme. Those who are not within a structured organization or who employ less than three persons, youths growing informal gig economy that started businesses on their laptops without any offices yet are earning decently. We are passionate about micro pension as today’s event revolves around the audacious industrial goal to engage as many informal sector workers as possible to sign up for the scheme for the benefit of everyone”, Mr Agudah submitted.

For a better society

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