Lessons from the Solomon Islands: Innovating with Pensions for the Informal Sector
Saving for retirement usually is not one of the first priorities people have. Many people contribute monthly to a plan linked to the company they work for. This is however generally not the case in developing countries, where many people work in the informal sector. This is the case in the Pacific, where nearly 80 percent of people work in the informal economy and as such do not have access to a formal superannuation fund. Furthermore, as demographics and socio-economic relationships are changing, people can rely less on their family for support in old age. In the Solomon Islands the Wantok system, a traditional welfare system that evolves around clans and tribes, also makes it harder to accumulate long-term savings.
This case study features PFIP's work from May 2017 to February 2018 with the Solomon Islands National Provident Fund testing a micropension product for the informal sector.