Study finds lack of pension causes poverty

A STUDY has revealed that the lack of urgent and effective response to pension exclusion among Papua New Guinea’s elderly population can emerge as the dominant cause of increased poverty rate in the country.
Nasfund, in partnership with United Nation’s Pacific Financial Inclusion Programme, has identified challenges and risks during consultations with Eda Supa – Nasfund’s voluntary superannuation product for non-salaried workers.
The study has identified that of the 30,000 registered account holders, only 2000 were making regular contributions.
Other members were not active because of complicated, inconvenient manual processes involving paper-based registrations which were expensive, the study showed.
The lack of automated reminders has meant that members were not vested in their contributions and could lead to them to losing their interest in long-term saving.
The study also evaluated existing and emerging digital financial services infrastructure and outreach in PNG through intensive consultations with the Bank of Papua New Guinea, Centre for Excellence in Financial Inclusion, donors, banks, mobile network operators, credit and saving societies, farm cooperatives, worker associations and exporters.
A series of focus groups in Port Moresby, West New Britain, Eastern Highlands, East Sepik and Northern were also conducted to gain insights from both members and non-members of Eda Supa
This found positive conditions that were conducive to the introduction of an inclusive digital micro-pension programme in PNG.
The report recommended phased changes that would help improve micro-pension coverage in PNG.
It called for product improvements, nationwide financial literacy on insurance and retirement and limiting withdrawals