Pencom and PenOp provide free health insurance for contributors

The National Pensions Commission and the Pension Operators Association of Nigeria plan to provide free health insurance to contributors to the micro-pension scheme.

They concluded on the plan after a meeting on ways to attract artisans into the contributory pension scheme.

Confirming this development, Managing Director of Access Pension Fund Custodian Limited, Ms Idu Okwuosa-Okeahialam, said the move was aimed at fostering inclusion in the scheme.

“The pension operators had a meeting and decided to register the contributors of the micro-pension scheme with the health maintenance organisations,” she said.

Only 73,600 informal sector workers enrolled in the contributory pension scheme at the end of December 2021, according to figures obtained from PenCom.

The law on pension reform, which came into force in 2004, provides for a contributory scheme in which the employer and the employee contribute to the workers’ RSA.

However, the CPS was only open to the formal sector since its inception, until the federal government officially extended it to the informal sector in March 2019.

As part of the government’s financial inclusion objectives, the PFAs have been tasked with ensuring the development of the micro-pension scheme to enable artisans and other self-employed people to plan for their financial future.

According to the MMP, contributors in the informal sector will be allowed to withdraw at least 40% of their RSA contributions before retirement.

This, however, is different from what is possible with the formal sector in which contributors could only access 25 percent of their RSA balance after four months of no paid employment or retirement.

However, to start withdrawing the 40% contribution, the craftsman must have contributed to his RSA for at least three months.

PenCom said: “Each contribution should be split in half, comprising 40% for eventual withdrawal and 60% for retirement benefits.

“The contributor may, depending on his needs, periodically withdraw all or part of the balance of the contingent part of his RSA, including all the investment income accumulated on it.

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