AIICO launches ‘Gift A Pension’ product

AIICO Pension Plc has launched a product – Gift A Pension – that allows Micro Pension Plan (MPP) to be bought for third parties. The initiative is expected to boost financial inclusion by increasing the number of informal sector participants in Nigeria’s voluntary pension scheme. It will enable people to reward their personnel and domestic […]

AIICO Pension Plc has launched a product – Gift A Pension – that allows Micro Pension Plan (MPP) to be bought for third parties.

The initiative is expected to boost financial inclusion by increasing the number of informal sector participants in Nigeria’s voluntary pension scheme.

It will enable people to reward their personnel and domestic staff by gifting them an MPP, and contributing on their behalf regularly, the Pension Fund Administrator (PFA) said at the product’s launch in Lagos.

The company’s Head, Corporate Communication, Bankole Ekundayo, said the initiative was launched because the company believed “everyone deserved a pension; whether they worked in the formal sector or the informal sector.”

According to him, the company observed that a lot of people could not afford to have a pension and decided to come up with an initiative that allowed workers in the formal sector become responsible for funding the micro pension account of their loved ones and domestic or personnel staff who were not in formal employment.

He said, “We are very confident this initiative would deepen the financial coverage because beneficiaries of the product have sponsors in the formal sector.”

President Muhammadu Buhari, in March, 2019, launched the Micro Pension Scheme to reach the informal sector as a step towards promoting financial inclusion nationwide.

The government also set a target to attract as much as N3tn and reach as many as 30 million people through the scheme.

The company’s Managing Director, Babatunde Fajemirokun, said the uptake of micro pension had been slow on the back of a slowly recovering, low-wage economy.

He said: “Many people had hoped micro pension would be the next big thing because, at that time, less than 10 per cent of the working population had pension accounts. The experience, however, has been totally different.

“Because the Micro Pension Scheme is voluntary, it has become a secondary consideration for many Nigerians in the informal sector; some of who are domestic workers, farmers and merchants.”

The CEO further noted that the problem of information, ease of access and education had also played a role in the rate of enrollment for pension products.

He said, “As a result, we have had to examine the environment and look for a niche entry. Micro pension for us is research and development being a long-term investment.”