Each morning in Bugesera, Thomas Nyirimana starts his motor bike knowing that his livelihood depends on strength and stamina that will not last forever. The 43-year-old taxi-moto operator saves Rwf1,500 each month through the EjoHeza long-term savings scheme, hoping it will one day protect him in old age.

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So far, Nyirimana has accumulated more than Rwf160,000, an amount he hopes to grow through increased contributions. The father of four also plans to enrol his children to instil a culture of saving.

"Though I still have the strength to work, it won’t last forever. A person who saves is better off than one who does not. Saving through EjoHeza provides security during retirement,” he said.

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For many informal sector workers setting aside small amounts each month, guaranteed retirement benefits often feel like a distant hope. Proposed reforms to the EjoHeza scheme aim to make that goal more attainable by easing access to savings and lowering the threshold for retirement benefits.

On Wednesday, January 28, Cabinet approved a ministerial order setting out new modalities for granting benefits under the scheme. It also approved a draft law amending the 2017 law that established EjoHeza and governs its organisation.

According to Rwanda Social Security Board (RSSB), which administers the scheme, the reforms are intended to make EjoHeza more supportive during life events, more inclusive for young people and informal sector workers, and more reliable in securing a dignified income at retirement.

EjoHeza was created to extend pension services to informal sector workers who are not covered by the mandatory public pension fund, which is also managed by RSSB.

Early access to savings

Under the proposed changes, members will be allowed to access up to 30 per cent of their accumulated savings before retirement, while 70 per cent will stay invested to support income at retirement.

RSSB said the measure responds to the realities of informal workers and young savers with irregular incomes, allowing them to cope with emergencies while continuing to save.

"With this flexibility, you can put some money aside for retirement with the peace of mind that you can access up to 30 per cent of your savings when you need it in case of shocks,” Gaspard Bayigane, the Head of the EjoHeza division at RSSB, told The New Times.

"So, it's really to tell the youth that you can save freely in EjoHeza, you will access it anytime you want for any purpose before retirement.”

Nyirimana welcomed the proposal, saying it would encourage more people to save.

"One of the things that discourages people from saving in EjoHeza is the belief that once you save, the money is locked away with no pre-retirement benefits,” he said.

"Knowing that, in case of a problem, you can access up to 30 per cent of your savings to help you—that can motivate many people to join.”

Making pensions more attainable

The reforms also introduce greater flexibility for members aged 55 and above, which remains the retirement age under the scheme.

They seek to reduce the minimum savings threshold required to qualify for a monthly pension from Rwf4 million to Rwf2 million, a move aimed at making benefits more attainable for low-income earners.

Members will also be allowed to withdraw more than 25 per cent of their accumulated savings, including accrued interest, provided the remaining balance is sufficient to support a monthly pension. Under the current law, members whose savings reach or exceed Rwf4 million can withdraw only 25 per cent of the total amount.

Members already entitled to a monthly pension under another mandatory scheme will be allowed to withdraw up to 100 per cent of their savings, including accrued interest.

Why Rwf2 million?

Explaining the rationale for lowering the threshold, Bayigane said the existing Rwf4 million requirement discouraged many informal workers.

"This figure was sort of discouraging many savers because it's too high for the type of savers that we have in the scheme currently. So, it was almost unattainable for most people,” he said.

The revised Rwf2 million threshold, he added, is more realistic and expected to encourage regular saving by giving contributors a clearer target.

"For someone who starts saving at a young age, I think reaching Rwf2 million is not difficult,” he said.

Bayigane explained that EjoHeza is a defined contribution scheme, meaning benefits depend on how much a member saves and the interest earned.

A member who accumulates Rwf2 million by retirement age, for example, could opt to receive monthly payments over a chosen period. If paid over 20 years starting at age 55, the initial monthly pension would be about Rwf8,300, rising gradually as the remaining balance continues to earn interest.

Starting early makes a significant difference, he added. A saver contributing Rwf5,000 per week from age 25 could accumulate about Rwf39 million by age 55, translating into an initial monthly pension of about Rwf162,000, excluding future interest gains.

Increased flexibility for welfare improvement

RSSB said allowing withdrawals of more than 25 per cent at retirement reflects members’ preference for lump sums, while ensuring that a minimum balance remains to provide regular pension.

"We've seen a behaviour that most people would save up to Rwf4 million even if they have saving capacity that can exceed Rwf4 million, because the previous legislation was saying that when you have above Rwf4 million, you can only withdraw 25 per cent,” Bayigane said.

"And most people will want to have that money as a lump sum at retirement so that they can solve their problems. They want to have it as a big amount.”

On concerns that pension payments could end after a fixed 20-year period, he clarified that members can choose how long to receive benefits based on their accumulated savings.

"So, the instalments in this legislation are flexible,” he said.

Labour perspective

Eric Nzabandora, the president of the Labour Congress and Workers’ Brotherhood in Rwanda (COTRAF Rwanda), welcomed the reforms but cautioned that many informal and casual workers may still struggle to reach the Rwf2 million threshold due to low and unstable incomes.

"All these changes are positive and welcome, and no one would oppose them,” he said. "But the key question is whether people with very small savings will realistically be able to reach the Rwf2 million needed to benefit from these advantages.”

He said many informal workers earn as little as Rwf1,500 to Rwf2,000 per day, limiting their ability to save.

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Nzabandora decried the lack of a minimum wage in the country, arguing that it creates a situation where some workers earn too little to meet their basic needs and be able to save.

"This is why we continue to point to the absence of a minimum wage,” Nzabandora said, arguing that a basic wage would enable workers to both meet daily needs and save toward retirement.

While praising the reforms for making the scheme more flexible, Nzabandora warned that without additional measures, some workers may still reach retirement age without qualifying for a monthly pension.

Current scheme overview

As of January 28, EjoHeza members had collectively saved more than Rwf62.2 billion since the scheme’s launch in 2018.

Including generated interest—estimated at about 12 per cent annually—and government incentives for eligible savers, total assets under management exceeded Rwf89 billion, according to RSSB.

The scheme had about 4.7 million registered members, of whom approximately 4 million were active savers. RSSB attributed the gap largely to newly registered members who had not yet begun contributing.

Interest earns interest

EjoHeza’s interest is effectively compounded over time. In other words, the rate functions in a compounding manner over the long term, implying that interest earns interest.

The scheme adds the interest earned on your savings back into your account balance, and future interest is then calculated on that growing total. That means your savings benefit from compound growth rather than paying interest separately each year. In practice, EjoHeza credits 12 per cent annual interest to member accounts and the profit is added to the accumulated savings so it continues to earn interest in subsequent periods.

Bayigane said the magic of compounding interest is where the real power of saving with EjoHeza shine.

"When you save money, the scheme adds interest to your account. Next year, you earn interest not just on your original savings, but also on the interest already added. Over time, this snowballs; the longer you leave your money, the faster it grows.”

To start saving, he said, dial *506#

Or visit https://ejoheza.rssb.rw/en