Yemisi Izuora
Stanbic IBTC Pension Managers Limited, has outlined four vital measures needed to bring the country’s huge informal sector into the formal pension system.
These are awareness and collaboration with key associations and unions; tax incentives and guarantee; seamless registration and service delivery.
According to the Chief Executive, Stanbic IBTC Pension Managers Limited, Mr. Eric Fajemisin, these steps would attract a sizeable chunk of the estimated 38 million workers in the informal sector and significantly boost the reported eight million people currently registered under the Contributory Pension System (CPS).
Accounting for about 60 percent of Nigeria’s Gross Domestic Product and employing over 90 percent of its workforce, the informal sector is largely insignificant in the CPS.
Fajemisin spoke in Port Harcourt, Rivers State, at an employers’ forum organized by the PFA to encourage participation in the pension scheme. He was represented at the event by the Executive Director, Investments, Mr. Oladele Sotubo.
Fajemisin said it is imperative to raise the level of awareness through major informal sector associations and unions due to the prominent role they play in the sector. In addition, endorsements from these unions will help to motivate members and build the requisite trust in the pension scheme.
The on-boarding process for the informal sector customers’ needs to be flexible and devoid of any form of complexity, Fajemisin said, adding that this objective can be achieved through the adoption of a unique identifier like BVN and the use of mobile technology for registration, collection and benefit payment.
On service delivery, the Stanbic IBTC chief said the provision of satisfactory services to the informal sector through channels they are conversant with will ensure availability and accessibility. Adopting the existing ecosystem they operate and using mobile devices to access important information will add more transparency and trust to the scheme.
Via the Pension Reform Act 2014, the legal framework for micro pension was established, extending the coverage of CPS to self-employed persons, most of whom operate in the informal sector.
The employers’ forum, titled Partnering to Deliver Excellent Pension Administration Services, was the third in the series this year, having held in Benin and Enugu. A total of seven cities across the country are scheduled for the forum this year. The initiative was launched in 2014 as a platform to engage with employers, as a crucial anchor of the nascent pension scheme, to sign up to the CPS.
Zonal Head, South-South, National Pension Commission, Mr. Kehinde Awotunde, who commended Stanbic IBTC Pension Managers Ltd for organizing the forum, urged other organizations to emulate it. He said deepening awareness about the pension scheme requires the collaboration of all stakeholders as there are numerous benefits to ensure peace of mind in retirement.
A similar appeal was made by the Permanent Secretary, Office of the Head of Service, Rivers State, Dame Josephine Chukuigwe, who noted that information is power because as Nigerians become better informed about the benefits of planning for retirement, they would embrace the pension scheme. Rivers State, she said, is passionate about the wellbeing of its employees, hence the state enrolled in the pension scheme in 2015. She said the state welcomes collaborations that would support the state’s developmental aspirations, especially in executing critical projects and overall economic development.
Head, Business Development, Stanbic IBTC Pension Managers Limited, Mrs. Nike Bajomo, said the PFA’s significant breadth of knowledge in the market, backed by the expertise and experience of Stanbic IBTC Group, a member of the over 154-year-old Standard Bank Group, will remain instrumental in delivering value-driven services to clients. She said transaction notifications on contributions, quarterly statements and quarterly pension notes are regularly sent to customers through SMS, emails and hardcopy statements to enhance transparency and trust and ensure that contributors have up-to-date information on the status of their pension funds.