73,600 informal sector workers registered under the Contributory Pension Scheme(CPS) as of the end of December 2021, according to figures obtained from the National Pension Commission (PENCOM) on ‘Micro pension registration and contribution’ for the fourth quarter of last year.
The data showed figures, 62,463 informal sector workers had joined the CPS as of the end of December 2020, while the number rose by 3,292 as of the end of first quarter of 2021.
PenCom stated that the informal sector workers’ cumulative contribution rose by N16.71m to N106.3m as of the end of March 2021, from the N89.68m recorded as of the end of December 2020.
The report said micro pension registration and contribution during the first quarter showed that Pension Fund Administrators registered 3,292 contributors under the Micro Pension Plan. According to PenCom’s fourth quarter report, more artisans were showing interest in the CPS.
It stated that, “19 PFAs registered 2,166 contributors during the quarter under review. This brought the total number of micro pension contributors to 73,600 as at 31 December 2021.
“Similarly, the sum of N25.09m was credited into the RSAs of 8,260 MPP contributors in Q4 2021, bringing the total value of the micro pension fund to N224.05m as at end of the quarter under review.”
The Pension Reform Act, which came into effect in 2004, provides a contributory arrangement in which both the employer and employee contribute into the workers’ RSAs. However, the CPS was only opened to the formal sector since inception, until the Federal Government officially extended it to the informal sector in March 2019.
As part of the financial inclusion objectives of the government, the PFAs were instructed to ensure the development of the micro pension plan to enable the artisans and other self-employed workers to plan for their financial future. According to the MMP, the informal sector contributors will be allowed to withdraw at least 40 per cent of the contributions in their RSAs before retirement.
This is, however, different from what is obtainable with the formal sector in which contributors could only access 25 per cent of their RSA balance after four months of being out of paid employment or at retirement.
However, to start withdrawing the 40 per cent contribution, the artisan must have contributed to his RSA for a minimum of three months.
PenCom stated, “Every contribution shall be split into two, comprising 40 per cent for contingent withdrawal and 60 per cent for retirement benefits.
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