MICRO PENSIONS
PRESENTED BY: MRS. NICOLETTE JENEZ
Senior Director - Pensions
Financial Services Commission
RETIREMENT PLANNING
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
THE JAMAICAN SCENARIO
INFORMAL EMPLOYMENT
LOW PENSION COVERAGE
INCREASED LIFE EXPECTANCY
INFORMAL EMPLOYMENT
 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
LOW PENSION COVERAGE
 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
INCREASED LIFE EXPECTANCY
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
MICRO PENSION MODEL IN INDIA
 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.
HOW IT WORKS – FIELD OFFICERS
HOW IT WORKS - TRAINING
HOW IT WORKS – WELCOME KIT
HOW IT WORKS - SWIPE
HOW IT WORKS – MOBILE
CONFIRMATION
MICRO PENSION IN INDIA
Technology driven system
 Who are the partners:
 Companies issuing credit cards
 Commercial banks
 Credit Unions
 Building Societies
Outreach Partners
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.
MICRO PENSION IN INDIA
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.
BENEFITS OF MICRO PENSION
 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
JAMAICAN PROPOSAL
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.