Nigeria’s Pension Industry Targets 40 Million Contributors By 2020

..As Transfer Windows Opportunity Begins  Next Year .

Yemisi Izuora

The National Pension Commission, PENCOM, has said that there is likelihood of the pension industry meeting a set target of 30 per cent contributors from the nations working population which represents 40 million participants into the scheme by 2020.

The target is expected to be highly complemented through the Micro pension scheme.

PENCOM has also designed guidelines for the scheme in such a simple and flexible manner so as to accommodate more participants.

Peter Aghohowa, head Corporate Communication of PENCOM while speaking at the 2019 media retreat organised by the Pension Operators Association of Nigeria (PENOP), also disclosed that the transfer window of Pension Fund Administrator (PFA) has tentatively been fixed to be opened by June 2020.

He said that the pension operators and PENCOM had been meeting and work had reached an advanced stage toward achieving this and that in a couple of months, the database will be ready because it is a prerequisite for the transfer window “and that is why we say we are getting closer and optimistic that we will reach the milestone,” he said.

“One thing that is critical towards this, is the Enhanced Contributor Registration System (ECRS) that was recently launched.

“That is what is making our data integrity better, coupled with the fact that we are also linked with the National Identification Management Commission (NIMC) on issue of National Identification Number(NIN).

Aghohowa also confirmed that 19 Pension Fund Administrators (PFAs) have registered 28,000 micro pension participants as at October, 2019.

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On the Micro pension issue, he said the scheme recorded fast growth though was marred by registration challenges.

He noted that contributors will enjoy all the benefits of micro pension, which includes Improve standard of living of self employed in retirements, also contributions can be passed to the next of kin and contributors on programmed withdrawals that meet the requirement would be eligible for minimum pension.

Speaking further, Aghahowa stated that registration has however been challenged due to low financial literacy, because a lot of Nigerians at the low income level still do not understand the benefits of pension and as such often mistake the scheme as scam.

Other challenges highlighted by the head of communication, are low National Identity Number (NIN), which is one of the criteria for registration; low awareness about the scheme and inadequate technology platform to support the registration process.

Tackling these challenges, the commission has embarked on a campaign across the traditional, social and digital media, engaging with union, associations, professional bodies and Non Governmental Organizations, says Aghahowa.

“Though NIN has slowed down the process of micro pension registration, PenCom has however collaborated with the DescriptionNational Identity Management Commission (NIMC) to ensure that participants get their numbers on time to fast track registration.

“The commission is working on having its own USSD code to ease payment of pension contribution for enrollees,” he added.

Mrs Ronke Adeniji, President of PENOP, added that while the pension scheme was so far a success story, a lot of work still needed to be done to make it better.

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Adeniji said the ongoing data verification was to ensure that the database of contributors was clean and in a state suitable for the transfer window.

She said that the requirement of NIN was one of the major challenges that had marred the process of the data clean up.

“But we are making progress, and now with the collaboration with NIMC, we expect that the transfer window will evolve after the data clean up, ” she said

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