Friday 19 October, 2018
Improving provision of Voluntary Contributions by NASFUND
Through a partnership with NASFUND, the United Nation’s Capital Development Fund (UNCDF) through its Pacific Financial Inclusion Programme (PFIP) commissioned a feasibility study to evaluate Eda Supa (NAFUND’s voluntary superannuation product focused on informal sector people who outside of the compulsory superannuation net).
PFIP in its continuous aspiration to bridge and delivering financial services engaged a reputable consulting firm (pinBox Solutions Pte) that specialises in pension coverage to carry out a feasibility study on EDA SUPA’s viability to expand voluntary pension in PNG. The study has revealed that the lack of regular income & social protection among PNG’s future elderly people could emerge to be the leading cause of increased poverty rate in the country, highlighting importance of micro-pensions.
The study found positive conditions that are conducive to the introduction of an inclusive digital micro-pension programme in PNG and identified areas of improvement in the product features and process of account opening and easy, affordable and convenient contributions.
Under the leadership of BPNG through a regulatory sandbox, PFIP and NASFUND will scope the next phase of the project which will aim at putting to test improvements in the product and the way people can access it through a pilot.
The aim of the pilot is to get traction from the informal sector players to make contributions whilst taking the opportunity to improve the uptake of the product in maintaining high activity levels. Currently there are 29359 subscribers to Eda Super of which 7 % are active contributors. Lack of awareness, cost implications and accessibility are identified as some of the key barriers in improving adoption rates.
The Pacific Financial Inclusion Programme (PFIP) in collaboration with NASFUND will undertake the pilot to determine how to extend coverage of superannuation and pension benefits to people who are not in formal employment and are currently outside of the superannuation net by virtue of their status.
Photo caption: Joint Meeting between Bank of PNG, NASFUND and UNCDF-PFIP Representatives discussing Regulatory Sandbox for NASFUND to pilot provision of voluntary contributions for Papua New Guineans in informal sector.
PFIP is a Pacific-wide programme that has helped 1.9 million low-income Pacific islanders gain access to financial services and financial education. It achieves these results by funding innovation with financial services and delivery channels, supporting policy and regulatory initiatives, and empowering consumers.
PFIP operates from the UNDP Pacific Office in Suva, Fiji and has offices in Papua New Guinea, Samoa and Solomon Islands. It is jointly administered by the UN Capital Development Fund (UNCDF) and the United Nations Development Programme (UNDP) and receives funding from the Australian Government, the European Union and the New Zealand Government.
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