Janashakthi Insurance introduces new pension plan for retirement
View(s):6.8 million workers don’t have a proper retirement plan
By Sunimalee Dias
Doing a reality check based on available statistics has found that Sri Lanka’s growing ageing population problem would be further compounded with the 6.8 million people currently employed not having a proper retirement plan.
Central Bank statistics have pointed out that out of the 20.8 million people in the country 7.8 million are employed out of which only 1.2 million are government employees. It was also noted that the 2.7 million people are above 55 years but only 473, 762 are pensionable.
Sri Lanka has been declared as having the fastest ageing population in the region of South Asia by the World Bank in 2009. The Government annually spends Rs 102 billion on pensions, according to the Central Bank’s 2011 annual report.
These startling facts, have created a wake-up call as the burden on the state would increase in the future with the growing ageing population in the country, Janashakthi Insurance company said recently at a media briefing held to launch its new pensions for life “Lifesaver” plan for retirement in Colombo.
It was pointed out that only 5 per cent of the population was eligible for a retirement cover since the country has one of the fastest growing ageing populations in South Asia.
The report also indicates there would be at least 64 out of hundred people at 65 years that would be dependent on others; and that five out of 100 will be self-supporting but will lead a frugal lifestyle.
In the wake of these developments, Janashakthi Insurance Deputy Chairman and product architect Chandra Shaffter said they came up with a retirement plan for which anyone could start out at any time.
He proposed the savings habit for retirement and noted that the new policy would ensure that policy holders could stick to a budget and make sure money is saved in advance but which can be used at any time after a lapse of five years from the start date. He also noted that the policy allows people to get an insurance life cover for permanent disability as well.
The policy allows policy holders to decide how they would use the money upon retirement as a lump sum to be handed over to them or as a monthly pension, he explained.
Mr. Schaffter observed that this policy allows holders to also use this money for their children’s higher education or wedding plans as well.
Janashakthi Insurance General Manager Sales and Marketing Shehara De Silva speaking with the Business Times said Sri Lanka lacks a proper taxation policy explaining that if tax benefits were given for savings it would help the country in the long run. She pointed out that a number of development organisations have advised the government on the need to address the issue of an inadequate pension plan for all.
This issue could be addressed by creating incentives towards savings and proposing new pensions plans, Ms. De Silva said.
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