Retirement is an inescapable stage of life. The older you become, the closer you are to retiring. If you are close to 30 years or above and don’t have a retirement plan yet, you should consider starting one as soon as possible.
In our previous posts, we shared with you why it is crucial to start a pension plan before it is too late, everything you need to open a Retirement Savings Account (RSA) and your retirement benefits.
Today, we will zero in on the best retirement plan for you if you are self-employed. In this post, you will understand:
What it means to be self-employed
Are you entitled to a retirement plan if you are self-employed?
What is the retirement plan for self-employed individuals known as?
What are the requirements to register under the plan?
Who is a self-employed individual?
A self-employed individual is a person who works in the informal sector and earns a steady income from providing services or selling goods to the citizens of the country in which they live. They are mostly known as artisans or traders.
According to the Head of Corporate Communications of the National Pension Commission (PenCom), Abdulqadir Dahiru, about 90 per cent of workers in Nigeria are in the informal sector.
Are you entitled to a retirement plan if you are self-employed?
The simple answer is yes. The Pension Reform Act (PRA) 2014 allows self-employed individuals to make voluntary contributions under the Contributory Pension Scheme towards their retirement.
This means that as a self-employed individual, you are entitled to receive a pension. And according to PenCom, a pension is a regular income received by a person at retirement when he or she has stopped working because of having reached a certain age or based on health condition to cater for his or her needs at old age.
What is the retirement plan for self-employed individuals known as?
The retirement plan for self-employed individuals in Nigeria is known as the Micro Pension plan/scheme.
The Micro Pension Plan refers to an arrangement under the Contributory Pension Scheme (CPS) that allows the self-employed and persons working in organisations with less than three (3) employees to make financial contributions towards the provision of pension at their retirement or incapacitation.
It will interest you to know that the Micro Pension Plan has been successful in countries like Ghana, Kenya and India.
Micro Pension ensures you get a stable income during retirement. It reduces old-age poverty and the process is easy, simple and flexible.
According to Dahiru, “The Micro Pension Plan is a flexible plan, where artisans, traders and even a woman that sells fried beans cake (akara), can register with and agree on a periodic amount she/he would be contributing according to her/his earnings.
“The contributors, within this flexible Micro Pension Plan for all Nigerians in the informal sector, can even draw out 40 per cent of what they have saved for emergency demand; while the remaining 60 per cent would remain and await the retirement plan proper.
“So, it is a means of savings also for those in the informal sector and where they could fall back to and get financial assistance to keep their daily engagements going.”
READ ALSO: What a Micro-pension plan can do for you
What are the requirements to register under the plan?
To participate in the Micro Pension plan, here are the requirements:
You must be Nigerian
You must not be below 18 years of age
You must have a legitimate source of income
You must belong to a trade/association/profession
And of course, you must be self-employed or an employee of an organization with less than three employees with or without a formal employment contract.
If you meet the above requirements, then you can proceed to register with us at Oak Pensions Limited.
To open a Retirement Savings Account (RSA) under the Micro-pension plan, call our Marketing Manager at 09087448661 or send us an email via info@oakpensions.com.
After your registration is successful, we will issue your unique Personal Identification Number (PIN) to you.
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