NATIONAL PENSION COMMISSION FRAMEWORK FOR MICRO PENSION PLAN 2018
Plan · Finance
Policy date: 2018-01-01
A Plan enables informal sector workers and self-employed persons to join the Contributory Pension Scheme with flexible contribution options. It targets artisans, traders, farmers, and micro enterprises. This extends pension coverage to Nigeria's informal sector and builds retirement savings habits.
NATIONAL PENSION COMMISSION FRAMEWORK FOR MICRO PENSION PLAN 2018
What Is This Policy?
A framework enabling informal sector workers, self-employed persons, and micro-enterprise employees to join the Contributory Pension Scheme through flexible, small-amount contribution arrangements.
Who Does It Target?
Artisans, traders, farmers, and self-employed persons Informal sector workers without employer pension benefits Micro and small enterprises PFAs offering micro pension products
What Does It Aim to Achieve?
Extend the Contributory Pension Scheme to Nigeria's large informal sector, build retirement savings habits among informal workers, and increase the inclusiveness of Nigeria's pension system.
Key Features
Flexible Contributions: Allows contributors to remit any amount at any frequency, removing the fixed monthly contribution requirement. Contingency Access: Permits contributors to access up to 40% of their balance in the contingency portion for financial emergencies. Retirement Savings Portion: At least 60% of contributions are locked in the retirement savings portion until retirement. Low Cost Structure: Fees for micro pension accounts are capped at lower rates to make the scheme affordable for low-income contributors.
Current Status
Rollout Stage: Active - PFAs are enrolling informal sector contributors Coverage: Nationwide, informal and self-employed sector Beneficiaries: Millions of informal sector workers previously excluded from pension coverage Funding: Self-funded by contributors; PenCom/government support for outreach
How to Access
Open a micro pension RSA with any licensed PFA Provide valid identity (NIN or BVN) Begin contributing any amount through the PFA app or agent banking channel Application method: Enrol at any PFA branch, agent point, or through PFA mobile apps.
Important Terms
The contingency portion can be accessed but withdrawals reduce retirement savings Frequent withdrawals from the contingency portion undermine the retirement objective The retirement savings portion is locked until age 50
Impact & Metrics
Tens of thousands of informal sector workers enrolled since the micro pension plan launch in 2019.
Official Resources
Website: https://www.pencom.gov.ng Contact: National Pension Commission (PenCom)
Legal Framework
The National Pension Commission Framework for Micro Pensions operates under the Pension Reform Act 2014, the National Pension Commission (PENCOM) Regulations, and the Central Bank of Nigeria Act 2007 (on mobile money for pension contributions). It aligns with the National Financial Inclusion Strategy, the Alliance for Financial Inclusion (AFI) standards on financial inclusion for informal workers, and ILO Convention 102 on Social Security minimum standards for old-age benefits.