PenCom to allow artisans obtain loans from their RSA

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………micro pension plan initiative

There are also indications that the commission is planning to introduce incentives such as access to loans for artisans and others in the informal sector so that they can voluntarily buy into the scheme, the operators have said.

Recall that since the inception of the CPS in 2004, only the formal sector has been allowed to have Retirement Savings Account, but they are not allowed to access the funds at will.

Thus, the commission saw it as necessary to introduce some incentives to woo the informal sector into the scheme through a guideline that it is presently working on.

This guideline will give the informal sector access to their funds in the CPS which will not going to be made mandatory for them, according to PenCom.

According to the operators, the guideline considered the fact that a lot of informal sectors with poorly paid, sometime, not under any employer and therefore might need access to their money at any time.

PenCom stated that the Pension Reform Act 2014 expanded coverage of the CPS to the self-employed and persons working in organisations with less than three employees.

“As this category of workers constitutes the larger percentage of the working population in the country, there is no doubt that to achieve the pension industry’s strategic objective of covering 30 per cent of the working population in Nigeria under the CPS by the end of 2024, all hands should be on deck to extend coverage to this important segment of the Nigerian economy,” PenCom stated.

The commission said that due to their widely dispersed nature and generally low and irregular incomes, there was a need to provide a pension plan that would meet their needs.

PenCom said the Micro Pension Plan initiative had been conceived within the context of the industry to bring this class of workers on board.

In implementing this initiative, it stated that the informal sector had been segmented into three broad categories – the low income earners, the high income earners and the Small and Medium Enterprises.

It stated that each of these categories was going to be targeted with appropriate pension products and sensitisation programmes that would meet their peculiarities.

The commission said it was evident that a robust technological platform that would support the provision of customer services was necessary to effectively and efficiently register, collect contributions, provide the RSA support, pay benefits and provide financial advisory services to this class of workers.

“Coincidently, special mobile phone applications had been successfully implemented in some jurisdictions for financial transactions including provision of pension services to the self-employed and informal sector workers,” it stated.

The commission said the success story of these applications was driving the confidence that similar platforms could be designed and implemented in Nigeria.

It added that the commission had already commenced the sensitisation of service providers and relevant regulators as well as the targeted workers in the informal sector with a view to creating the enabling environment and buy-in.


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