Retirement Repair

Janashakthi Insurance launched a new retirement saving scheme aimed at the working population, including those nearing retirement. The Janashakthi Life Saver pension plan, unlike previous pension programmes, allows a retiree to invest a lump sum in the scheme and collect a monthly allowance over a specified period of time up to 20 years or for life. Thereafter, it will continue to pay out to the spouse.
Shehara De Silva, General Manager Sales and Marketing, said a number of factors were taken into consideration in developing the new pension scheme, in particular the general notion that it is impossible to invest in a pension scheme with the current cost of living. De Silva added that most individuals did not also consider their options post-retirement, especially when it is 10 or more years away. “As a country, as a people, we have a mental block. If someone tells me that I need to plan for 20 years we can’t make those commitments.”
De Silva says with Sri Lanka’s population rapidly aging, the working population had to make a commitment to forego perhaps one social outing or a party, a holiday or other non-essential activity in order to invest in a post-retirement plan. “People need to realise they would not want to reach out to their children or relatives for money for a cup of tea or for medicines.”
The Janashakthi Life Saver scheme allows individuals to top up as and when they can, as opposed to current schemes that require a monthly commitment, with the policy lapsing if premiums are missed. In addition it allows individuals to remit as little as Rs1,000 a month.
“A lot more imagination is needed in the way insurance is sold, possibly even in the way the schemes are structured. This is a first step and we hope will be a game changer,” De Silva added.
According to the World Bank, the share of the elderly population over 60 years old is expected to increase from 12.5% to 16.7% in 2021. By 2041, one out of every four people is expected to be an elderly person, making Sri Lankans the oldest population in South Asia. That will include most of the current workforce.
The president in his 2013 budget speech mentioned that the government spends Rs112 billion annually for pension payments to an estimated 500,000 retired public servants.