Cynthia Ezekwe
Despite a surge in enrollment, the micro pension fund’s progress has hit a roadblock, as a significant number of workers have started reducing their contributions, raising concerns about the long-term sustainability of the programme, according to the first quarter report released by the National Pension Commission (PenCom).
This development signals economic strains on companies, shifts in workforce preferences, and the complexity of managing them, as it relies on the savings capacity of the workers to thrive.
Nigeria’s micro-pension scheme was launched in 2019 to extend the reach of pension to the self-employed and employees of organisations with a minimum staff strength of three, in a bid to provide cover for 30 per cent of the national workforce by 2024. A key goal of the effort is to boost the country’s financial inclusion.
The scheme, one of the most strategic financial inclusion measures of the Federal Government managed by PenCom, aimed to register about nine million participants by 2023. However, as of the first quarter of 2024, the programme has fallen short of its with only 12,941 contributors enrolled, representing a significant shortfall.
PenCom, in its quarterly report, noted that total pension contributions received from Micro Pension Contributors (MPCs), in Q1’24 declined 35.4 percent to N111.4 million from N150.8 million received in the preceding quarter, Q4’23.
The report also indicated significant growth in the number of MPC registration by Pension Fund Administrators (PFAs) which increased by 40.7 per cent to 12,559 in Q1’24 from 8,927 recorded in Q4’23.
“A total number of 12,559 Micro Pension Contributors (MPC) were registered during the period under review by 17 Pension Fund Administrators bringing the total number of registered MPCs from inception to 126,941 as at 31 March 2024 the report noted..
According to the first quarter report from PenCom, Access Pensions Limited, accounted for 80.1 per cent of the new Micro Pension Plan (MPP) registration with a total of 10,058 out of the 12,559 registered participants while Stanbic IBTC Pension Managers Limited followed with 1,628 accounting for 12.96 per cent of the total registrations in the Quarter.
“The total registration from inception to date shows that Stanbic IBTC Pension Managers (PFA) Limited, ARM Pension Managers Limited and Access Pensions Limited registered the largest number of Micro Pension Contributors (MPCs) with 25,149 (19.81%), 24,341 (19.18%) and 23,030 (18.14 %) respectively, as at 31 March 2024,” the report noted.
As the workforce changes, so do the preferences of workers and their needs. One noticeable shift is that younger workers now favour savings-based retirement plans, creating new complexities in managing employees.
Data from PenCom on fresh registration under the CPS shows that, among youths, 339,789 male registered while 206,186 females registered from 2022 to 2023.
A breakdown of the data shows that in 2022, 269,014 workers below age 40 registered for the CPS, with males accounting for 177,369 or 65.8 per cent, while females accounted for 91,646 or 34.2 per cent.
