The World Bank report of 2021 entitled, “Long Shadow of informality, Challenges and Policies,” estimated that over 80.4 percent of Nigeria’s labour force is in the informal sector. Persons involved in the sector do not have access to any formal pension protection or coverage for old age. The result is old age poverty, especially with people living longer due to improved medical care. To address the situation, the National Pension Commission (PenCom) introduced the Micro Pension Plan (MPP), a long-term voluntary financial plan that would enable informal sector workers participate in the Contributory Pension Scheme (CPS). This initiative of PenCom is in line with the provisions of Section 2(3) of the Pension Reform Act (PRA 2014), which allows self-employed persons and employees working in organizations with less than 3 workers to participate in the CPS in accordance with the Guidelines issued by PenCom.

Before the launch of the MPP, these categories of workers, along with those of organisations that employ less than three workers were not mandatorily covered by any retirement benefit scheme. PenCom initiated the MPP to provide financial stability to these workers in their old age. An informal sector participant interested in joining the MPP is required to enroll by completing the registration forms, accompanied with a valid means of identification (International passport, Driver’s License or National ID card) with any PFA of his/her choice. Such individual should be at least 18 years of age and resident in Nigeria. Once the RSA is opened, the Micro Pension Contributor (MPC) is issued with a Personal Identification Number (PIN) by the PFA. It is important to note that upon securing employment in the formal sector with any organisation that has three or more employees, the MPC will be eligible to participate under the mandatory CPS. However, once the MPC joins the mandatory CPS, he/she cannot convert back to the MPP.

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