Many elderly people have questioned the need to start contributing to a pension scheme at the age when they are actually supposed to be benefiting from it, had they saved earlier.
Such is the challenge that Jean Baptiste Kabarira, the Chairman of COOTHEVM Tea Cooperative, is confronted with while mobilising members to sign up and contribute to Ejo Heza Long Term Saving Scheme (LTSS).
"Why do I have to save for my retirement when I am likely to die anytime is the question many frequently ask,” Kabarira said.
Ejo Heza is a pension scheme intended to guarantee the welfare, especially of workers in the informal sector once they retire as a result of old age, debilitating diseases or permanent disabilities resulting from occupational hazards.
Both salaried and non-salaried employees are entitled to contribute to and benefit from it.
A member of Ejo Heza who is 55 years and above is eligible to get a monthly pension for a period of 20 years.
Jacques Rutsinga, Ejo Heza Mobilisation Manager, said that there is more that elderly people can gain from contributing to this scheme than not doing it at all
"No one is in a position to determine when someone dies, some may live longer others not. Ejo Heza is a programme for all Rwandans, we usually tell them that they should at least save one year and live in the benefits for three years or more,” he explained.
While the focus on mobilisation is mainly on younger people, according to him, the elderly are also always encouraged to contribute to the scheme as their savings will benefit their young relatives.
"If one dies, their family is given at least Rwf250,000 for funeral arrangements and an additional Rwf1 million as life insurance,” said Rutsinga.
In 2021, Ejo Heza recorded an increase of 167.9 per cent in the number of contributors to 1,423,377, up from 531,344 in the year before, according to central bank data.
The number of informal sector contributors now outpaces the one under the formal sector, which demonstrates that Ejo Heza is living up to its billing of bridging the pension and social security coverage gap in the country.
The number of formal contributors under Rwanda Social Security Board (RSSB) declined by 1.3 per cent to 587,479 in 2021 from 595,502 in 2020.
According to the central bank, the decline is a reflection of the reduced contributions of temporary workers who had been employed during the construction of schools across the country in 2020.
Rutsinga said that currently, Ejo Heza savings amount to more than Rwf28 billion, a significant increase from over Rwf2 billion contributed by 200,000 subscribers in 2020.
He said that the increase draws from the fact that the scheme was integrated into district performance contracts (Imihigo) which promoted its awareness and uptake in terms of subscription and contribution.
In particular, he said, there was no resistance from the target category of people, including cooperatives, businesspeople, and other private institutions.
"Saving Rwf1000 or Rwf2000 is better than not saving at all. We are creating awareness on the importance of this pension scheme but also about maximizing the contribution to be better off in one’s old age,” he added.
As of 2021, about 561 people have benefited from the scheme, according to data from the Central Bank.
The law setting up the scheme, Rutsinga said, provides that if your savings have surpassed Rwf4 million, you can get 40 per cent of it and use it for various purposes such as collateral to secure a loan from a financial institution, mortgage, or paying school fees for yourself or your children, provided that your remaining reserve in the programme is not less than Rwf4 million.
For one to receive pension, they should have saved Rwf4 million and above. In case the savings are less than that, the subscriber gets a lump sum – a single amount consisting of the money they saved plus the interest accrued over time.