The Pension Reform Act (PRA) 2014 was expanded to cover the CPS to the self-employed and persons working in organizations with less than 3 employees.
The question is: Do SME workers need pensions? The answer to this is a resounding YES!
According to NBS & PenCom, the pension asset has consistently grown from N2.5trillion in Dec 2011 to N6.2trillion as at Dec 2016. This is one of the fastest growing pension assets in the world, but to my greatest surprise, Nigeria is among the countries with low pension penetration level.
This explains why the coverage was extended to self-employed and organizations with less than 3 employees.
The bigger question is what will be the impact of the “Micro Pension Plan Initiative” on the following:
Personal Income Tax
Disposable Income
Economic growth and
Financial Stability of employees after retirement
Watch out for our next submission on this topic: MICRO PENSION PLAN INITIATIVE
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