Financial sustainability of a social security scheme is heavily reliant on contribution collection and compliance. Inspired by the ISSA Guidelines, the Local Authorities Pension Trust (LAPT) has identified administrative solutions to improve access to contributory social security programmes for populations that are difficult to reach.
In light of this, LAPT set-up an individual pension plan (Mpension) to plug into the mobile market and launched it in October 2014. This primarily targeted the informal sector. Individuals could subscribe by dialing a USSD number and make contribution payments through mobile payment wallet. To enhance compaliance, the Mpension “Save As You Spend” concept was developed and is currently being deployed through a leading bank by custormer base and a large telecommunication service provider in Kenya. The “Save As You Spend” concept leverages on the spending habits of individuals by making micro auto deductions from their spend into their pension wallets. The solution addresses the inherent lack of discipline in pension savings whilst ensuring a balance between immediate needs and future needs of an individual.