Mr Issa Aremu, General Secretary, National Union of Textile, Garment and Tailoring Workers of Nigeria (NUTGTWN) has commended President Muhammadu Buhari on the launched of the Micro Pension Plan (MPP) for retired self-employed workers in the informal sector of the economy.
Aremu said this in a statement on Friday and made available to newsmen in Abuja.
President Muhammadu Buhari on March 28th launched the Micro Pension Plan (MPP) which automatically extends retirement benefits to millions of self-employed workers in the informal sector.
According to him, the President’s stamp will definitely legitimise the Contributory pension scheme in both formal and informal sectors.
”If implemented, pension coverage will be more inclusive to include millions of self-employed who for now are not assured of life after work no less they are assured of life during work due to income inadequacy.
“There will be sustainable investable funds for socio-economic development. So far, with as many as 8.5 million formal sector workers covered, as much as N8.7 trillion pension assets have been accumulated.
“With potential 80 million workforces, the potential for accumulated workers’ capital is better imagined. Micro pension is certainly a sustainable measure against mass income poverty that has pushed workers in both formal and informal sectors into the abyss of poverty.
“With the micro pension launch and expected attendant increase in pension assets, there is no doubt that the nation is also assured of investable funds for poverty alleviation as well as wealth generation,” he said.
The General Secretary said the Pension Reform Act of 2004 was the most significant legislation of the 2nd National Assembly.
Before the new Act, the old scheme had pension deficit of about N2.3 trillion in 2004 and pensioners were not paid entitlements regularly.
“The contributory scheme is fully funded with employers contributing 10 per cent and employees contributing 8 per cent deducted directly from workers’ salaries and promptly transferred to workers’ retirement savings accounts.
“Today Pension assets have grown from N2.9 trillion in 2012 to over N6.5 trillion, thanks to the efforts of the successive leaderships of the National Pension Commission (PENCOM).
“The Scheme was amended in 2014. Significantly the Act was amended to widen the scope of coverage to include the informal sector, tighten sanction for non-compliance and review the rates of contribution among others. The rates were also made equitable with employers paying more than the workers.
“Employers contribute 10 per cent while workers contribute eight per cent making a total of 18 per cent as against the inaugural 15 per cent (7.5 per cent each).
”With the amended PRA 2014, PenCom initiated the framework for the Micro Pension Scheme that targets the informal sector which was rolled out on Thursday,” he said.
He however, said the provision 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 Organisations in which there are three or more employees.
“It is commendable that 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 refers to an arrangement for the provision of pension to the self-employed and persons operating in the informal sector through the Contributory Pension Scheme,” he said.
Issa said beyond the presidential launch on Thursday, PenCom must utilise various channels of communication in educating the public on Micro Pension Plan.
He said the most important and effective channels should be periodic town hall meetings with trade Unions, trade Associations and Cooperatives to educate members, proffer clarifications and address concerns on Micro Pension Plan.
He said trainings must also be organised for leaders of unions, associations and cooperatives to be Micro Pension champions to coach and enlighten their members. (NAN)