FG Rolls Out Micro Pension Scheme for Small Businesses

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SWITZERLAND, SEPTEMBER 11 – The Federal Government, through the national Pension Commission, has rolled out a micro pension scheme to cater for small businesses in Nigeria.

According to the government, the scheme is to ensure that every Nigerian, even those in the formal sector gets a pension and have a secure retirement.

President Buhari launched the scheme on March 29, 2019.

Also Read: Buhari launches pension scheme for informal sector

According to the Nigeria Pension Commission, the provisions of the Pension Reform Act 2014 (PRA 2014) applies to all employees in the Public Service of the Federation, Federal Capital Territory, States and Local Governments and the Private Sector Organizations in which there are three or more employees.

However, Section 2(3) of the Act provides that employees of organizations with less than three employees as well as self-employed persons shall be entitled to participate under the Contributory Pension Scheme in accordance with Guidelines issued by the Commission.

The categories of persons referred to in Section 2(3) of the PRA 2014 constitute the vast majority of the working population. 1.2 Most of the workers defined in Section 2(3) are not covered by any retirement benefit scheme as the nature of their employment has made access to a structured pension system a challenge; hence, the need to extend coverage of the Contributory Pension Scheme to them.

“Accordingly, the Commission considers it necessary to develop a framework for the implementation of the provisions of Section 2(3) through a “Micro Pension Plan”. Micro Pension Plan shall refer to an arrangement for the provision of pension to the self-employed and persons operating in the informal sector through the Contributory Pension Scheme. The primary objective of Micro Pension Plan is to provide retirement benefits to the Micro Pension Contributor,” the Pension Commission said in its framework for the micro pension scheme.

” There are too many people out there in the informal sector in Nigeria who will get older, be unable to work and earn a regular income and then become a huge burden on an already weak and fragile society with almost non-existent social security or welfare programs. ” Omagbitse Barrow, Chief Executive of Learning Impact Nigeria said.

Hopefully, with the advent of the new initiative, this category of Nigerians will be catered for.

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