The Former Director-General, National Pension Commission (PenCom), Muhammad Kabir Ahmad, has implored the Federal Government to link the micro pension scheme with social welfare scheme to enable informal sector workers key into the system.
He disclosed in an interaction with journalists in Abuja, stressing that the micro pension plan could be leveraged to provide social welfare for the citizenry as there is no social security program in the country.
“We need the plan as we do not have social security in Nigeria, perhaps, micro pension should be an opportunity, if well established and the government is willing. The government should work out how the plan can be linked with social investment program, so that somebody who contributed for a period of 20 years, could be allowed by the government to have a minimum pension.
“The moment people know that they would have such benefit, they would embrace the plan for they know that there is a minimum pension benefit awaiting then, having contributed for a certain period,” he said.
Ahmad posited that the informal sector is characterized by a number of things, and is bigger than the formal sector; hence, the regulator and operators must be innovative in terms of regulation and documentation.
He called for high level of trust in the running of the plan, whilst also canvassing the need for understanding of how the informal sector is structured.
“There should be a level of trust in the system. We need to go back and understand the basis. We have to be innovative and should not force anything on anybody. When we understand the system it becomes easier. It is not about legislating micro pension, but about understanding the mechanism and relationship with the informal sector, and why somebody in the village will do a business with you. The micro pension is not about the government but the operators,” he added.
According to him, the pension industry grew because the operators went out to encourage the public to open Retirement Saving Accounts (RSAs). He therefore, opined that the private sector should be allowed to drive the initiative, adding that if the plan is not private sector led, it would not be sustained.
Micro pension plan is one of the tools envisaged by the National Pension Commission (PenCom) to bequeath a better life to the self-employed in the country, as it expected to attract over 20 million workers and N3 trillion into the pension assets and help structure the funds in the informal sector of the economy.