WHAT IS PENSION?
Pension is a regular income received by a person at retirement when he/she stopped working because of having reached a certain age or based on health condition to cater for his/her needs at old age.
WHAT IS MICRO PENSION PLAN?
Micro Pension Plan refers to an arrangement under the Contributory Pension Scheme (CPS) that allows the self-employed and persons working in organizations with less than three (3) employees to make financial contributions towards the provision of pension at their retirement or incapacitation.
WHY MICRO PENSION?
Micro Pension guarantees secured future through steady income at retirement. It reduces old age poverty, and the process is easy, simple and flexible.
WHO CAN PARTICIPATE IN THE MICRO PENSION PLAN?
A Micro Pension prospect must:
- Be a Nigerian, not below 18 years of age;
- Have a legitimate source of income;
- Belongs to trade/association/profession; and
- May be self-employed or an employee of an organization with less than three employees with or without a formal employment contract.
HOW DO I REGISTER/ENROL FOR MICRO PENSION PLAN?
An eligible Micro Pension contributor can enrol/register through any Pension Fund Administrator (PFA) of his/her choice, obtain and complete the Retirement Savings Account (RSA) Opening Form either physically or electronically. A unique Personal Identification Number (PIN) would be issued to the registered contributor.
WHO WILL MANAGE AND KEEP CUSTODY OF FUNDS ACCUMULATED UNDER THE MICRO PENSION PLAN?
The Pension Fund Administrator (PFA) manages and invests funds accumulated under Micro Pension Plan on behalf of the contributor, while the Pension Fund Custodian (PFC) keeps the fund and assets in safe custody.
WHAT MEASURES HAVE BEEN PUT IN PLACE BY THE NATIONAL PENSION COMMISSION TO SAFEGUARD THE FUNDS UNDER THE MICRO PENSION PLAN?
There is effective monitoring and supervision of the Plan by the Commission through daily monitoring of the Plan asset and investment decisions made by Pension Fund Administrators to ensure that their decisions are in line with relevant laws and Investment Regulations issued by the Commission.
DO CONTRIBUTIONS IN THE MICRO PENSION RETIREMENT SAVINGS ACCOUNT GENERATE INCOME?
Yes. PFAs invest all pension contributions and all income from such investment activities are credited into the RSA of the contributor.
IS THE MICRO PENSION PLAN DIFFERENT FROM A SAVINGS ACCOUNT MAINTAINED WITH A COMMERCIAL BANK?
Yes. Micro Pension Plan is different from savings account maintained with a Commercial Bank because any savings made under the plan can only be withdrawn as monthly pension after retirement. On the other hand, savings made with Commercial Banks can be withdrawn anytime as the need arises.
WHAT IS THE MINIMUM AMOUNT OF CONTRIBUTION ACCEPTABLE UNDER THE MICRO PENSION PLAN?
There is no stipulated minimum amount of contribution under the Micro Pension Plan because it is dependent on the Contributor's pension aspiration and financial capacity. Thus, higher contributions will result in more money available for pension.
HOW OFTEN CAN ONE CONTRIBUTE UNDER THE MICRO PENSION PLAN?
Contributions can be made daily, weekly, monthly or as may be convenient to the contributor and shall be subject to reporting requirements under the Money Laundering (Prohibition) Act.
HOW CAN I MAKE CONTRIBUTIONS UNDER THE MICRO PENSION PLAN?
Contribution under the Micro Pension Plan can be made by cash deposit or electronic transfer through any payment platform, or other financial service agents approved by the Central Bank of Nigeria (CBN).
HOW DO I ACCESS THE BALANCE IN MY RSA UNDER THE MICRO PENSION PLAN?
A contributor can access the balance in his/her RSA through two means namely; Contingent withdrawal and Retirement benefit withdrawal.
WHAT IS CONTINGENT WITHDRAWAL?
It is the withdrawal of that portion of the RSA balance (contributions plus returns on investment) made available for withdrawal to ease financial pressures or needs of the Micro Pension contributor before his/her retirement.
WHAT IS RETIREMENT WITHDRAWAL?
It is the withdrawal of that portion of the RSA balance that the Micro Pension Contributor shall be eligible to access as monthly pension upon retirement in accordance with the Regulation for the Administration of Retirement and Terminal Benefits.
HOW DO I WITHDRAW MY CONTINGENT PORTION?
A Micro Pension Contributor can withdraw an amount from his/her contingent portion by applying to his/her Pension Fund Administrator (PFA) in a prescribed format.
FOR HOW LONG WILL AN INDIVIDUAL CONTRIBUTE BEFORE HE/SHE CAN ASSESS THE CONTINGENT PORTION?
A Micro Pension Contributor shall be eligible to access the contingent portion of the balance of his/her RSA three (3) months after making the initial contribution. Subsequently, he/she can make withdrawals once in a week, from the balance of the contingent portion of the RSA.
HOW LONG DOES IT TAKE TO RECEIVE PAYMENT FROM MY CONTINGENT CONTRIBUTION?
The Pension Fund Administrator is mandated to approve and pay the amount requested from the contingent portion within 48 hours of application for withdrawal.
WHAT IS THE RETIREMENT AGE OF A MICRO PENSION CONTRIBUTOR?
A Micro Pension Contributor shall retire upon attaining the age of 50 years or on health grounds. However, a Micro Pension Contributor can choose to extend his retirement age beyond 50 years
HOW DO I ACCESS MY CONTRIBUTIONS AFTER RETIREMENT?
A Micro Pension contributor shall, upon retirement, access his/her retirement benefits through either Programmed Withdrawal or Life Annuity.