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Pencom Simplifies Documentation Process For Pension Fund Contributors

As part of moves to boost confidence in the participation of the Micro Pension Plan, the National Pension Commission is strategising to provide incentives such as health insurance to those that will embrace the scheme. 

This is just as the Commission revealed that it has simplified the documentation process for pensioners under the Contributory Pension Scheme.

The Director-General of PenCom, Aisha Dahir-Umar said these on Thursday in Abuja during the 2022 workshop for journalists.

The workshop which was organized by the Commission has as it’s theme, “Increasing informal sector participation in the Contributory Pension Scheme: The case for Micro Pension Plan.”

President Muhammadu Buhari had on April 27, 2019 officially launched the Micro Pension Plan as part of his administration’s efforts at ensuring that Nigerians who worked hard during their active years in service of their fatherland live in dignity and retire without any cause for alarm.

The Micro Pension Plan was initiated by the National Pension Commission to incorporate workers in the informal sector of the economy.

Since the launch of the MPP in March 2019 by Buhari, over 72,846 contributors had been registered by Pension Fund Administrators.

The Micro Pension Scheme targets the significant majority of Nigeria’s working population who, incidentally, operate in the informal sector.

The MPP was conceptualised to expand pension coverage to the informal sector, including small-scale businesses, entertainers, professionals, petty traders, artisans, and entrepreneurs.

Speaking at the workshop, Dahir-Umar said the MPP is being implemented to curb old-age poverty by assisting the workers to contribute while working and build long-term savings to fall back on when they become old.

She said the theme of the conference aligns with the Commission’s objective of expanding coverage of the CPS.

The aim, she added, is to bring into the CPS Nigerians working in the informal sector of the economy and those who are self employed through the Micro Pension Plan.

She said, “It is of utmost importance to educate the media on the MPP and enlist your support to make the Plan popular amongst informal sector workers and the self-employed.

“The Commission is mindful of your critical role in disseminating factual information to its stakeholders. So, it is imperative to constantly interact and inform you of recent developments in the pension industry and some of the Commission’s significant activities.

“Strategic efforts to drive the Micro Pension Plan remain one of the important areas of focus of the Commission.

“To boost confidence in the participation of the MPP, the Commission is strategising to provide incentives such as health insurance.” 

The Pencom DG also said that the Commission is implementing series of measures to improve the pension scheme noting a Revised Regulation on the Administration of Retirement and Terminal Benefits has been issued to Pension Fund Administrators (PFAs) for immediate implementation.

The revised regulation has mandated PFAs to make efforts to ensure that all documentation preparatory to the retirement of the RSA holder should be provided and concluded within a period of four months prior to the date of retirement.

She explained that the Regulation guides the process of accessing retirement and terminal benefits by pension contributors and retirees under the CPS.  

The PenCom Boss said the key highlights of the Revised Regulation include clarifications and simplification of documentation processes, Retirement Savings Account consolidation before payments of retirement benefits, accrued pension benefits for private sector contributors, and additional lump sum payments.

The revised regulation stated that the retirees shall be allowed to access additional lump sum after the payment of the initial lump sum provided that there are additional inflows of funds into the RSA from the employers.

However, the additional remittances shall first be applied to augment the pension up to 50 per cent of the retiree’s final salary while the balance may be paid out as a lump sum.

Where the retiree’s pension is already up to 50 per cent of the final salary, the retiree may choose to collect the entire additional remittances as a lump sum.

Where the additional inflow into the RSA of a retiree-on-Retiree Life Annuity is not up to N100,000, the amount shall be paid directly into the retiree’s bank account, subject to the commission’s approval.

She added that the Revised Regulation also contains several new provisions on Pension Enhancement, Voluntary Contributions, payment under the Micro Pension Plan, payment of benefits of missing persons, and payment of Nigeria Social Insurance Trust Fund benefits.

To ensure strict adherence by Pension Fund Administrators, the PenCom DG said the Revised Regulation also introduced Administrative Sanctions on PFAs who disregard the provisions of the Regulation.

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