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Until fairly recently, the idea of saving for retirement seemed to be a dream only public sector workers or employees of large corporations could have. Outside of those zones, the vast majority of Nigeria’s workforce had to trust that the future would not be so harsh on them, or that their familial successors would do well enough to take care of them in their old age.

In March 2019, the Federal Government formally launched the Micro Pension plan, a program which effectively lets the country’s army of self-employed and informal sector workers take back control of their own post-retirement realities. Built with the fragility and limitations of these job types in mind, this version of the national pension scheme has a number of flexible tweaks to it that should allow more persons secure their financial future.

Before its coming, the existing national pension scheme was only accessible to public sector workers and businesses with more than 15 workers. This effectively shut out the over 37 million Nigerians who operate in the informal sector from enjoying the benefits of the system. The recent move to broaden the reach of the pensions scheme could mean that up to 30% of these people could be firmly within the system by 2024.

At least, that’s the goal of the National Pensions Commission, the body saddled with the responsibility of overseeing pension issues in Nigeria. Its officials say the new plan could help slash poverty at old age by 85%- a not-too-insignificant portion of the country’s poor. They acknowledge it’s going to be an uphill task, but they say they’re determined to make it work.

Some Important Features of the Micro Pension Plan

A number of features make the micro pension plan appealing. Here’s a roundup of the more outstanding ones:

1. Anyone who’s signed up for it can contribute to their pension fund on a daily, weekly or monthly basis, or as frequently as they can within a year.

2. They can contribute any amounts as their income or financial capabilities allow them. However, small charges will be incurred on contributions.

3. Contributors can withdraw 40% of their micro pension fund over time for ‘contingency purposes’- in other words, for current use. The other 60% will only be accessible at age 50 or after retirement.

4. Withdrawals from the 40% available for present use can be done once a week.

Who Benefits from the Plan?

Beneficiaries of this plan will fall under any of the following categories:

•Low income earners

•High income earners


The plan should cover self-employed persons, or entrepreneurs who run businesses with a staff of less than three persons (categories which were excluded in the existing national pension scheme). That’s basically market traders, commercial motorcyclists and bus drivers, lawyers, accountants, and anyone who operates a one-person venture or works with a very small team.

How to Get a Micro Pension Plan for Yourself

Follow these steps to sign up for a micro pension plan:

1. Visit a Pension Fund Administrator near you, with a means of identification (Voters’ card, International passport, or National ID card) and necessary documentation (BVN, letter of employment, or certificate of business registration).

2. Open a Retirement Savings Account (RSA) by completing a registration form at the PFA you’ve visited.

3. Receive a PIN generated by the National Pension Commission (PENCOM). The PIN is transmitted to your PFA after they’ve passed on your details to PENCOM.

The PIN lets you run your Retirement Savings Account as yours. You can contribute to the account as frequently as you can, and make withdrawals as the plan allows.  

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This article was first published on 1st May 2019


Ikenna Nwachukwu holds a bachelor's degree in Economics from the University of Nigeria, Nsukka. He loves to look at the world through multiple lenses- economic, political, religious and philosophical- and to write about what he observes in a witty, yet reflective style.

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