Pension and insurance professionals have demanded that micro pension and insurance plans be redesigned to include both Nano and Small and Medium Enterprises (SMEs).
An arrangement under the Contributory Pension Scheme (CPS) known as a “Micro Pension Plan” enables self-employed individuals and those employed by businesses with less than three (3) employees to make financial contributions toward the payment of a pension upon retirement.
The experts advised that operators must acknowledge the segmentation of the informal sector and start providing solutions that meet their requirements at the 7th National Association of Insurance and Pension Correspondents, NAIPCO, conference in Lagos.
The managing director of Heirs Life Insurance Limited, Mr. Niyi Onifade, spoke on the topic of “On-Boarding Small and Medium Scale Enterprises into Micro Insurance and Pension Space in Nigeria.” He noted that MSMEs and SMEs have a number of risks that insurance operators must consider in order to provide a cover in order to reduce old age risk.
He contends that insurers need to start realizing that SMEs now include more than just artists and vulcanizers but also include well-educated individuals who run a variety of businesses.
In a similar vein, Mrs. Funmi Omo, Chief Executive Officer of Enterprise Risk, stated: “For us as insurance practitioners, there are a lot of things we should do. In order to engage individuals, we must first meet them where they are. Since the informal sector employs both educated and uneducated individuals, we must be diversified in our approach.
Mr. Oguche Agudah, Chief Executive Officer of the Pension Fund Operators Association of Nigeria (PenOp), bemoaned the low adoption of the plan and described it as a national emergency plan that will be used to save the future of the nation. Operators must start considering how to make the plan appropriate, accessible, and motivating for prospective participants.