MICRO PENSIONS PRESENTED BY: MRS. NICOLETTE JENEZ Senior Director - Pensions Financial Services Commission

Many Jamaicans do not have the opportunity to enjoy retirement because of:  Low earnings during working years  Inadequate Access to Financial Services  Lack of Planning RETIREMENT PLANNING

THE JAMAICAN SCENARIO INFORMAL EMPLOYMENT LOW PENSION COVERAGE INCREASED LIFE EXPECTANCY

 STATIN recorded employment rate of 86.6% as at January 2014 – however many are seasonally or intermittently employed  No access to formal savings institutions – No TRN INFORMAL EMPLOYMENT

 8.9% of Employed Labour Force contribute to a Pension Fund  5-6% of employed labour Force are provided a pension by the government  Reliance is placed on offspring and informal savings LOW PENSION COVERAGE

Life expectancy has increased significantly due to:  Improved Medical Technology  Improved access to health care  Improved access to prescription drugs as a result of Health Care Programmes INCREASED LIFE EXPECTANCY

 The Micro Pension model in India was developed by the Invest India Micro Pension Services (“IIMPS”)  Developed to assist marginal members of the labour force save for retirement  The model uses smart phones and card readers on the VISA platform to deliver a range of non-credit financial services to the poor at an affordable transaction cost. MICRO PENSION MODEL IN INDIA

 IIMPS collaborates with commercial banks, regional rural banks, microfinance institutions, self-help groups, NGOs, cooperatives, worker associations and unions  Uses secure, cashless micro-payment instruments including prepaid cards, bank accounts, or mobile wallets  Financial Literacy is vital for Micro Pension enrolment process  Products can be bundled (Pensions and Insurance)  Pension contributors/clients receive a Pension Literacy Toolkit and eventually a Welcome Kit which includes the Micro Pension Prepaid Card. MICRO PENSION MODEL IN INDIA

HOW IT WORKS – FIELD OFFICERS

HOW IT WORKS - TRAINING

HOW IT WORKS – WELCOME KIT

HOW IT WORKS - SWIPE

HOW IT WORKS – MOBILE CONFIRMATION

 Technology driven system  Who are the partners:  Companies issuing credit cards  Commercial banks  Credit Unions  Building Societies MICRO PENSION IN INDIA

 Partners are formally contracted to service and pension product providers and are paid fees for their services.  Outreach partners who seek to locate and motivate enrolment and also to ensure persistent contributions, receive a one time fee when the enrolment process is complete.  Transaction costs are subsidized and contributors pay a modest annual fee. Outreach Partners

 A Micro Pension client, is able to use a variety of secure, affordable, convenient and regulated channels for periodic transfer of micro savings to regulated product providers.  Direct, cashless transfer mitigates against risk and improves governance and compliance. MICRO PENSION IN INDIA

 Increased pension coverage  Inclusion of low income, informal rural and urban workers into the formal financial system  Use of already existing technology  Partnership with existing service providers  Sensitization of workers on the need for retirement planning  Low transaction costs  Easily understood operations BENEFITS OF MICRO PENSION

WHAT IS NEEDED?  Further research in the area of Micro Pensions  Modification of Indian Concept for a local best fit  Partnership with product and service providers  Feedback from the industry JAMAICAN PROPOSAL

LET US WORK TO INCREASE PENSION COVERAGE AND SECURITY DURING RETIREMENT. Jamaican Proposal