Pension fund operators in Nigeria say they have a lot of work to do to enable effective take-off and acceptance of micro pension by the informal sector workers.
They say that the major work is bringing confidence into the system to encourage participation and uptake as many people have a lot of doubt and fear when new things are introduced.
One of the operators who did not want his name mentioned, said “remember that the scheme is voluntary, which means you do not have any means to compel anyone to take the product, unlike the formal sector scheme, which is contributory by employer and employee and made compulsory under the law.”
According to the operator, “you and I, are aware that not a lot of people these days will want to deal with government because of declining confidence and when you tell them that micro pension is backed by government, they look at you and laugh”.
Ronke Adedeji, president, Pension Fund Operators Association of Nigeria reviewing the micro pension project recently , said “We have a lot of work in our hands, and that is to bring confidence into the system”.
Adedeji said effort must be made to convince customers that this is not one of those schemes that you hear about today, and tomorrow you don’t hear about it again.
She said that the regulator is passionate about this, and so is vigilant about branch operations of PFAs to ensure that service delivery is to standard.
Wale Odutola, head, Branding Committee of PenOp noted that the pace of registration of participants in the micro pension scheme is still very low compared to the Contributory Pension Scheme (CPS), adding that, the nature of micro pension scheme and its voluntary nature mean the pace of growth would be slower than the CPS that was made compulsory by law.
He stated that though operators envisaged this but pointed out that as time progresses and more people become aware of its immense benefits through increased awareness, the number of contributors will grow.
According to hi, operators have invested heavily in micro pension scheme, by getting the needed information technology infrastructure, as well as manpower to mobilise new pension contributors through the grassroots, noting that the approach of marketing and persuading Nigerians to join the scheme differs from other schemes.
“We, as operators, knew from the onset that the approach of using agents to market micro pension plan will not work because of its nature. So, don’t expect to see our agents in market places marketing micro pensions, the PenOp leadership said.
The nation’s pension industry will need to create the needed awareness and education to bring in an estimated 36.8 million population that are currently excluded from any form of financial services, to realise its 80 million informal sector access target, analysts have said.
President Mohammed Buhari at the launch of the Micro pension Scheme in Abuja recently said the scheme targets the significant majority of Nigeria’s working population who incidentally operate in the informal sector.
With an estimated 80 million people working in the informal sector of the economy, the Micro Pension Plan would take care of participants from various informal sector workers including market women, members of the National Union of Road Transport Workers, and members of textile, garment and tailoring associations, among others, the President had said.
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