The Pension Reform Act (PRA) 2014 expanded coverage of the Contributory Pension Scheme (CPS) to the self-employed and persons working in organizations with less than 3 employees. In this regard, the Micro Pension Plan (MPP) initiative has been conceived within the context of an industry wide strategy to bring this class of workers on board.
The Kaduna State Government adopted the contributory pension scheme for its workers in 2007; to ensure its success in the state, its implementation was reviewed in 2016, birthing a Bureau for more effectiveness administration.
In its proactive nature, the state government commenced joint meetings with Pension Fund Administrators (PFAs) operating within the state on how best to reach out to the informal sectors and ensure that every individual in the state gets an opportunity to enjoy the benefits of the pension scheme. The involvement of the state government will no doubt boost public confidence and acceptability thereby encouraging an upward surge in the number of subscribers and fund built up.
The MPP is flexible and allows a subscriber to make contributions of varying amounts and at varying periods, as best suits his or her cash flow. There is a 40% contingency provision from which the contributor can draw if the need arises; the 60% is reserved for pension at retirement.
While the collaboration continues between government and PFAs, private business individuals can walk into the offices of PFAs in the state and freely register for Retirement Savings Accounts (RSA) without hassles. The partnership from government, which is expected to be more in terms of sensitisation, will no doubt boost the confidence of the populace and the publicity will certainly encourage its teeming populace to open RSAs and fund their accounts accordingly.