Micro pension records mixed fortune as contributions decline

•Number of new registrations rise

There are indications that informal sector workers are reducing their contributions to the micro pension fund even as the number of contributors continues to rise.

This development may signal an adverse impact of economic hardship on the micro pension scheme as it relies on savings capacity of the workers to thrive.

According to the first quarter report released by the National Pension Commission, PenCom, total pension contributions received from Micro Pension Contributors, MPCs, in Q1’24 declined 35.4 per cent to N111.4 million from N150.8 million received in the preceding quarter, Q4’23.

Meanwhile the report also indicated significant growth in number of MPC registration by Pension Fund Administrators which increased by 40.7 per cent to 12,559 in Q1’24 from 8,927 recorded in Q4’23.

The micro-pension plan, MPP, was created by PenCom to encourage low income group, mainly self employed and informal sector workers, to have a pension savings for their old age.

The scheme, one of the most strategic financial inclusion measures of the Federal Government packaged and implemented by PenCom, had envisaged to enroll about nine million registrants by 2023. However, only 126,941 contributors were registered as at Q1’24.

The report stated: “A total number of 12,559 Micro Pension Contributors (MPC) were registered during the period under review by 17 Pension Fund Administrators bringing the total number of registered MPCs from inception to 126,941 as at 31 March, 2024.

“In Q1:2024, Access Pensions Limited, accounted for 80.1% of the new Micro Pension Plan (MPP) registration with a total of 10,058 out of the 12,559 registered participants while Stanbic IBTC Pension Managers Limited followed with 1,628 accounting for 12.96% of the total registrations in the Quarter.

“The total registration from inception to date shows that Stanbic IBTC Pension Managers (PFA) Limited, ARM Pension Managers Limited and Access Pensions Limited registered the largest number of Micro Pension Contributors (MPCs) with 25,149 (19.81%), 24,341 (19.18%) and 23,030 (18.14 %) respectively, as at 31 March 2024.”