THE Fiji National Provident Fund continues to identify ways to empower Fijians to save for their retirement which is why products such as the voluntary scheme was introduced.
The voluntary scheme was introduced in 1972, giving equal opportunity to informal workers inclusive of self-employed individuals to save for retirement. Informal workers refer to domestic workers, sweet sellers, fisherman, market vendors, taxidrivers, or canecutters/farmers etc.
Last year, the Pacific Financial Inclusion Programme (PFIP) funded a feasibility study on the viability of the voluntary scheme in Fiji.
This was undertaken by a Netherlands-based micro pension consultant specialising in pension research.
The study revealed a strong demand for such a product with more than 72 per cent respondents stating that they would rely on their own savings to provide for old age income.
More than 75 per cent were interested in a pension product that enabled them to save for retirement but also allowed withdrawals during times of emergency.
To enjoy the benefits of the fund’s voluntary scheme, one would only have to pay a minimum of $7 a month into their FNPF account; without a maximum threshold.
Anyone who pays more than $5000 would need to declare their source of funds.
Voluntary members are able to make payments at any FNPF office, through telegraphic money order (TMO) service at any post office or direct deposit to the FNPF bank account.
Understanding the importance of accessibility and convenience, FNPF has gone a step further by partnering with PFIP and Vodafone, to trial a service that will allow voluntary members to contribute via MPAiSA.
The service offers a convenient payment option for labourers, market vendors and those who may be self-employed such as those in the agriculture sector, to register and start saving for their old age through an FNPF account.
Registered M-PAiSA users can dial *567# to access the service on their Vodafone and Inkk mobile.
No longer will they need to physically visit the FNPF office, post office or bank but will now be able to save for their retirement by simply using this new digital platform.
Often people in the informal sector are financially excluded because they are not able to access services and resources as it is expensive and time consuming.
The mobile-based payment system will assist low income earners as it is highly accessible, convenient and enables financial inclusion for its users.
Story 1
Krishan Kumar is a 55-year-old pineapple and watermelon vendor at the Suva Market and is also a justice of the peace.
Krishan along with his wife joined the voluntary scheme this year after attending a presentation conducted by the FNPF member education and advocacy team.
His interest peaked when informed of the advantages of being an FNPF member which is why he and his wife signed up.
Krishan visits the FNPF Suva office to deposit $50 each into his and his wife’s voluntary accounts.
With the payment service now available through M-PAiSA, Krishan does not have to leave the market to pay his contributions at the office.
The couple find that the mobile payment service option is a good idea as those market vendors who have signed up for voluntary membership are sometimes embarrassed and deterred from paying their contributions given the small amounts they deposit.
Since signing up for the voluntary scheme, Krishan has been encouraging market vendors around him to join.
“Many of the market vendors present have been here for a while so with the contributions growing it can be used for medical, housing, education and funeral because at times we don’t have money put aside to pay for it,” said Krishan.
Story 2
For Ram Suresh, a 56-year-old fruit vendor, the annual interest and non-taxable of FNPF savings that was the reason he joined six years ago.
He knew that his future would be secured with FNPF as for the past five years alone, the interest credited to members has steadily grown from 5.5 per cent in 2013 to 6.35 per cent this year.
Ram currently deposits $100 per week although this can alter depending on the sales of his fruits so he is thankful that the minimum contribution is set at $7 per month.
Unlike a compulsory account (requiring mandatory periodic payments), the voluntary account is flexible and allows account holders to save into the account whenever they can.
The initiative to carry out payments through M-PAiSA means that he does not lose business for the time he needed to take to visit the FNPF office for payments.
Since becoming a voluntary member he has become an advocate for FNPF and encourages his fellow market vendors to join especially the younger generation.
“It might not seem like much when you begin, but over the years with good interest rates you will see your money grow,” Ram added.
This new initiative is well in line with FNPF’s strategic direction to extend its digital channels to improve customer access and reach to our services as well as encourage members to grow their contributions.
Over the next six to nine months, FNPF will test this initiative and will monitor users and gauge whether they will continue to save at regular intervals, also studying and analysing their behaviours, attitudes and motivation to do so.
If you want us to provide an awareness program for your work group, or social group, please feel free to contact us at publicrelations@fnpf.com.fj
