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Capacity building workshop on multi-tiered social protection with a focus on pensions

Under the current social protection system in Rwanda income protection in old age is provided through three different schemes. Workers in the formal sector are covered by the RSSB mandatory pension scheme. The mandatory scheme is based on contributions by employers and employees and provides pension payments based on a defined benefit pension formula entitling beneficiaries to monthly pension benefits. In 2018, the Government of Rwanda launched the EjoHeza scheme. The scheme promotes voluntary savings in individual accounts for the whole population with a specific focus on informal workers. Contribution amounts and regularity can be freely chosen by members. Finally, under Social Protection Sector Strategic Plan, MINALOC and LODA are transitioning from direct support to the most vulnerable households to a lifecycle approach. Part of this transition is the development and the roll out of an old age grant.

To achieve universal social protection, it is recognized that a combination of different schemes and approaches is needed. Those can include contributory schemes often targeted to formal sector workers and social assistance schemes usually funded through domestic budgets and international development cooperation. Such schemes together should build a coherent and comprehensive system which strives to cover everyone with a minimum guarantee while at the same time providing adequate benefits replacing previous work income. This approach is already pursued in many countries around the world. 

A pillar model would aim at universal coverage through combining different schemes/pillars.  Typically pillars will be more or less as follows: Pillar(0) non-contributory pensions supporting those with insufficient contributory capacity, Pillar(1) social insurance providing a defined benefit pension to those who had the means to contribute, Pillar (2) a complimentary contributory component, voluntary or mandatory, employment-based occupational or non-occupational defined-benefit or defined-contribution, and Pillar(3) voluntary personal private savings or defined-contribution pension schemes for those with the economic capacity to make additional personal savings.

With the three schemes described above, Rwanda has already the foundation of a multi-tiered pension system. Under the Global Flagship Programme on Building Social Protection Floors for All, the ILO supports RSSB and social protection stakeholders in Rwanda to conduct a study on the strengthening of Rwanda’s multi-pillar pension model to increase its contribution to objectives of old age poverty reduction and reduction of inequalities, and to promote alignment with international social protection standards. In the framework of the study, the ILO in collaboration with RSSB is organising a workshop to raise awareness on the important role multi-tiered social protection systems play to realize universal social protection with a specific focus on income protection in old age.
 

The workshop has the following objectives: 

  •  Increase understanding of a multi-tiered social protection systems and create awareness on how it contributes to achieving universal social protection.
  • Create awareness on the policy and societal objectives of old age protection and on the strengths and weaknesses of different schemes (mandatory/ voluntary, contributory/ non-contributory, individual accounts/ cross-subsidization, defined benefit/ defined contribution, individual risk/ shared risk, financial sustainability…) in achieving those objectives.
  • Strengthened understanding of the the current multi-pillar pension system in Rwanda and current strengths and gaps and strategies to address those.
  • Increased awareness and understanding of international standards on social protection and more specifically on protection in old age (C102, R202, C128, R131).

Resources related to the workshop are available in the resource section.

 
Talleres Rwanda vejez
03.04.2024
3138