PenCom DG outlines plan to broaden micro-pension scheme reach

The Director-General of the National Pension Commission (PenCom), Omolola Oloworaran, has unveiled plans to overhaul the micro-pension scheme to improve its appeal and boost enrollment, particularly within Nigeria’s vast informal sector.

Speaking at the 2024 PenCom Media Conference in Lagos on Thursday, Oloworaran acknowledged challenges in the scheme’s adoption and revealed the commission’s intention to rebrand and tailor the plan to better address the needs of diverse economic players.

She noted that the existing framework of the micro-pension scheme had limitations, with some informal sector operators rejecting the label “micro” as unrepresentative of their income levels. “What we are doing with a micro pension is treating it a little differently from how we were doing it before. As we know, the micro pension doesn’t resonate with everyone within the informal sector, and some operators have shared feedback about the players saying, ‘I’m not micro; I’m making millions in a month, and you want me to open a micro pension account.’ We want to rebrand the micro pension plan into a new one that will speak to every sector of the economy, including people who are at the bottom of the social strata,”she explained.

To address this, the commission plans to introduce a revamped micro-pension product that speaks to a broader demographic, including those at the lower end of the income spectrum. “What we want to do is remodel the micro pension plan and let it speak to individuals in the informal sector directly, so whether you are a farmer, fashion designer, gatekeeper, etc., we will be meeting their needs with the products that will be coming out, and I’m sure we will be able to get more people in,” she added.

Oloworaran also highlighted the underwhelming engagement by pension operators in driving the scheme’s growth but expressed optimism about the role of technology in expanding participation.

“When we finish revamping the scheme, I believe everyone will come on board to drive it. In addition to rebranding, we are also looking at the technology that can work for us. The numbers we are looking at are enormous. Right now, we have over 10 million contributors under the CPS in the formal sector, but under the informal sector, we have tens of millions of people.Based on the last numbers I saw, it was north of 70 million.

“If we can drive this micro pension, I expect us to go up to 20 million Nigerians getting on the scheme, and the only way we can do that is with technology. It is a lot of work we are going to do on that and working with the operators so that we can ensure that between now and next year, we have more contributors,” she said.

The DG further disclosed that PenCom is working to encourage more states to adopt the contributory pension scheme, reflecting the commission’s broader efforts to expand pension coverage nationwide.

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