By Elias Hakizimana.
Less than 10 percent of Rwandans currently save for their pension to secure their lives when they grow older, meaning that the rest 90 percent do not save for their retire and these are likely to face or live in old age poverty. The biggest portion of these people mainly work in the informal sector.
To solve this likely challenge, On 14th December 2019 the Government of Rwanda launched the long term saving scheme (LTSS) dubbed ‘Ejo Heza’.
Prior to it’s launch, the Law No.29/2017 of 29th June 2017 and the Prime Minister’s Order appointing Rwanda Social Security Board (RSSB) as administrator in April 2018 to promote long term saving among Rwandans were gazetted.
It is estimated that the scheme will achieve a contributions or savings amounting to Rwf20billion in next three years if Rwandans continue to embrace the scheme and save into it according to RSSB.
Today over 200,000 members have registered, 65,000 of them have started savings and today’s total savings amount to Rwf 600 million.
Ejo Heza is a Digital pension scheme as members use their mobile phones to register or save using USSD code *506# on both MTN and Airtel Tigo.
The minimum annual savings amount is Rwf15,000 for Rwandans in Ubudehe category 1 and 2 and Rwf18,000 for those in category 3 while Rwandans in category 4 save Frw 72,000.
In a bid to encourage more Rwandans to join the scheme, For the first 3 years The government will give a co-contributio to Savers in Ubudehe category 1,2 and 3 and any citizen who is a member of Ejo Heza and has paid up his or her minimum annual contributio, the Government of Rwanda will provide them with a life and funeral insurance cover.
The scheme is under the management of the Ministry of Finance and Economic Planning (MINECOFIN) and RSSB as its administrator.
Once a member has contributed at least Rwf 4million, once they retire they will be entitled to a monthly pension benefits.