#1Public Disclosure Authorized Public Disclosure Authorized Samuel Waterberg Gerard Bergsma People's Pension Trust 3. PEOPLE'S PENSION HOLDING Micro Pensions Ghana 'Making retirement enjoyable' Challenges | uptake | usage | interventions. Presentation World Bank 1 May 2018 Washington DC#2Agenda 1. Introduction 2. The pension challenge 3. Barriers to pension saving 4. People's Pension Trust Ghana Digital Finance Frontiers Pilot with CGAP PPT Ghana plans 5. 6. 7. Research opportunities TP People's Pension Trust ရာ PEOPLE'S PENSION HOLDING 2#31. Introduction TP People's Pension Trust Gerard Bergsma CEO & co-founder PPH/PPT · 35+ yrs Investment and asset management • Board member at PFZW ($220 billion AUM) • Social startup investor Samuel Waterberg CEO & co-founder PPT Ghana • GM of award winning health startup ရာ PEOPLE'S PENSION HOLDING 7 yrs Rabobank NL, Informal Sector Committee member NPRA, Board Membership 3#4RIS Money Point 7015 2)/20100√4. MARCH WATER BILL April water bill No Dates Names 114/06/16 66/16 3 28/05/16 Awabu-Immoro 70.00 6 64 14/05/16 Hassan-Hafsa 75 02/06/16 Mrs-Zongrah sons No of per Money Rooms, No! S455041 April maintanance fees May Maintanance fee Dater/ Dater Names 1/04/05/16 Alidu- AbduMarki, | Mond Road TOTALS, Abiba-Abdu Main Soldier 5.00 3 Maata-Mummum chairman) 5.00 4 Ziblim-Abdur-Raheem SIGD Maata-Mummuni Ziblim-Abdur-Raheem 9.10 S N 4 36.40 6 3 45.87 27.38 5 Awaby-Immoro 2 9. 10 18020 614los/16 Hassan-Hafsa Mrs-Zongrah 3 4 36.40 36.40 9010 4 36.40 1512 40301 18020 18.20 KIF 13 08/05/16 DF-1 14 Znd F 15 M-Net N -- 27030 9.10 18020 B 6 54.60 10 91.00 5/6 19 63.70 20 기 18.20 9.10 9. 10 22 723 27.30 M 9.10 141 35 20,2 20100 700 20100 20150 20100 6/05/16 Janet-swa mekpor 7/06/16 Gladys-Addo 1097 1108 01/06/16 Beatrice-Narh 2018012119 26/05/16 Adjowa- Boawa 30% 13 ging 20.00 Lira 20100, the 12 10 25/05/16 Filicia-fimanor (unty-sensing) 4 1308los16 Filicia Amanafunty-Samira] I 12/05/16 Comarth (70-Dela) Abdul-Naizes(Promise/Alice) Mr-Zong rah(mmr. Adu-Gyamfil) z Lice 2000 K-I 15 13 zn auf 20100/D-F Su) 20100 78100 2010 2016 20100 T]/20100 20.00 miah 20.00 4/1 17 15/19/04/16 TTC (Andy-Dwusy 16/05/16 C (Unity-Gifty) 177/05/16 (Ziblim-Ali) 18 5/620 18/10/06/16 Ernestina-Narthy 7 21 19/07/06/16 patiency-Ankrah 812 20/01/05/16 Beatrice-Horkorfmr-1-1) 7 13 121 14/06/16 Rubbert Nunetpeter 2 Mary-Marthy Ernest 10 22 70,00 20100 13 20150 14 725/05/16 patience-Amuzzy 29/06/16 Joyce-Tetteh (Joe) 3 40.00 - - 24/24/05/16 Ernesting-Hodji 28 56542 48.00 226.95 47-67 37.35 5.00 6 118.60 5.007 50155 5008 #7.02 250-50 SLOD 9 14.10 18.20 So 1623.20 5.00 11 500 32 27.30 118 13/06/16 Janet-Dwamekpor 19/06/16 Gladys-Addo 131/10 01/06/16 Beatrice - Narh 14/11/08/07/16 Adjowa-Baawa 44. 27, 46-46 Paid 106.40 S 14 17535 14.10 Filicia-Amanorlemity Ganging 5.00 13 ilicia-Amanor (unty Samira Abdul Naizer (Promise/Mic) 5.05 R-117 125.7035 Mr-Zonyrah/mr-du-Gyamfi siod D-F-1 23.20 16 19/27/16 TITIC (Andy-Owusu) 5.00 3√ 17/05/16 T.T.C Unty-Gifty) 5.00 4/12/18 2/05/16 T.T.C (Ziblim-AL) SIOD 3 107/16 Ernesting-Narthy Patience - Antrah 219 znd F 88.57 Z 15.75 $7.410 5.00 4/12 209.60 5.00 5/6 28.35 39 Beatrice Horolong Siêu 7 485 IS Rubbert-Nunekpeku Slor & 7217 Mary MarlhhErnest) 5.00 10 24 25/05/16 patience-Amuzzy Joyce-Tetteh lisaye) 196.12 5.00 11 65.79 500 5.00 143.95.0 $8.75 26 24/05/16 Ernestina-Kodji 2717/05/16 Khadija Osman firAyang, S.00 8.20#5ရာ People's Pension Trust 2. The Pension Challenge: A Failing System ရာ PEOPLE'S PENSION HOLDING Informal saving is not attractive for long term saving • Low or negative interest • High inflation . High cost of (saving) products Lack of formal (pension) saving products available • 70% of Ghanaians are 'unbanked' • 85% of workforce in the informal sector Traditional 'pension' of relying on children changing . • • • Family size shrinking (birth rate from 7 to 4 since 1970) Life expectancy increasing (from 50 to 62 since 1970) Urbanization (70% to 45% rural since 1970) Less working people to take care of elderly No government provided social protection 5#63. Barriers to Pension Saving TP People's Pension Trust Barriers to savings in literature: 1. Information and knowledge gap (training, simple models and apps) 2. Lack of trust, regulatory constraints (only for formal sector) 3. Transaction costs 4. Social constraints (How well is your group doing? Incentives/penalties) 5. Behavioral biases hinder voluntary contributions/long term perspective But also very practical barriers: Availability and access to flexible product for low income people Lack of money, basic needs get priority ရာ PEOPLE'S PENSION HOLDING 6#73. Stages of a Micro-pension 1. pre-uptake 2. uptake Social constraints Transaction Available costs flexible Developing financial Regulatory product literacy constraints and pension Trust T People's Pension Trust 4. benefit 3. usage overcoming daily struggles, barriers and live events building trust behavioral biases age 15+ 60+ ရာ PEOPLE'S PENSION HOLDING enjoy 7#83. Stages of a Micro-pension 1. pre-uptake 2. uptake Social constraints Transaction costs Available flexible Developing financial Regulatory product literacy constraints and pension Trust T People's Pension Trust 4. benefit 3. usage overcoming daily struggles, barriers and live events building trust behavioral biases age 15+ 60+ ရာ PEOPLE'S PENSION HOLDING enjoy 8#9Photo: Gayatri Vikram Murthy 2017#104. People's Pension Trust Ghana People's Pension Trust P ရာ PEOPLE'S PENSION HOLDING Vision: PPT will be recognize as the organization that successfully reduce old-age poverty by offering flexible and high- quality pension product for the informal sector. Ambition: PPT aim to provide 500.000 Ghanaians in the informal sector with a pension product by 2022 and 4 million people by 2027 in 8 to 10 countries in Africa. 10#114. People's Pension Trust Ghana People's Pension P ရာ Trust PPT Provides pension savings products tailored to the needs of informal sector workers in Ghana. 11 PEOPLE'S PENSION HOLDING#12Pension DO YOU? PEOPLE'S PENSION TRUST 23333 613or#13People's Pension Trust P ရာ PEOPLE'S PENSION HOLDING 4. PPT Ghana: Product Tailor-made, flexible pension products for informal sector workers, with withdrawal option Low cost pension administration system Integration with mobile money Distribution through partnerships Product and IT built to scale internationally 13#144. PPT Ghana: How it Works People's Pension Trust P ရာ PEOPLE'S PENSION HOLDING Adwoa is 35 and has a 1 acre plot in northern Ghana میرا saves $100 annually withdraws¹ $40 of her savings annually to pay for her savings accumulate interest; out- has a life expectancy at age 60 of 16 years performing education & inflation receives $104 (real value) annually for 20 years. health care 1 Participant can withdraw max 50% of their nominal contributions 14#15Empty#164. PPT Ghana: Business Model People's Pension Trust P ရာ Revenue model: 2.5% of Assets Under Management (AUM) P✶ S AUM = P * T * (1+i) Number of active' participants Net annual savings Number of years saved Investment return 16 PEOPLE'S PENSION HOLDING#174. PPT Ghana: Results TP People's Pension Trust 7,322 participants 38,641 deposits $5 average deposit 1.7 deposits per month average $102 average deposit per year 20% interest on savings annually <10% withdrawals PPT Ghana will have 50,000 participants by EOY 2018 ရာ PEOPLE'S PENSION HOLDING 17#184. PPT Ghana: Results 8000 7000 6000 5000 4000 3000 2000 1000 0 Number of customers TP People's Pension Trust ရာ PEOPLE'S PENSION HOLDING 1/15/17 2/15/17 3/15/17 4/15/17 5/15/17 6/15/17 7/15/17 8/15/17 9/15/17 10/15/17 11/15/17 12/15/17 1/15/18 2/15/18 3/15/18 18#1919#205. Digital Finance Frontiers Pilot with CGAP CGAP Advancing financial inclusion to improve the lives of the poor T People's Pension Trust Focus Areas Publications Data Regions Blog About CGAP Photos & Videos P Enter your keywords Search Blog > Want Your Customers to Save More? Use Behavioral Economics Want Your Customers to Save More? Use Behavioral Economics Customer Segment: Cocoa farmers (2 million) and market series Little/no access to pension Objectives: Testing the effects on savings behavior of: • Training . products • Irregular income • Expensive and short term savings products/behavior (susu) • Behavioral nudging Gamification ရာ PEOPLE'S PENSION HOLDING 20 20#215. Digital Finance Frontiers Pilot with CGAP T People's Pension Trust ရာ PEOPLE'S PENSION HOLDING Design • Training group - additional training on product and mobile payment • Reminder group - weekly reminder messages and message after 3 weeks of non-payment Soft commitment group - customer tells his intended saving per week and receives reminder Control group - no interventions 21 21#22People's Pension Trust P ရာ PEOPLE'S PENSION HOLDING 5. DFF Pilot: Activities • • . • • • Questionnaire by telephone Weekly reminder messages Additional reminder after 3 weeks of non-saving Reminder messages related to soft-commitment Bi-weekly group visits Every other day market visits ရာ People's Pension Trust Making retirement enjoyable Please tick the appropriate box Do you have a mobile money wallet? Yes No CGAP RESEARCH PROJECT Supplementary questionnaire What is the ownership status of your mobile device? Personal Shored None What is your average monthly income? Ghc How often do you receive your income? Daily Weekly Monthly Seasonal (Once Twice) Can PPT do direct debit on your mobile device? Yes Ghe No What is your target weekly contribution? How many dependents do you have? State Number For administration use only Write comments if any: USSD screenshot Welcome to Peoples Pension Trust Please select your preferred option 1. Register 2. Contribution/Pay 3. Check Balance 4. Contact Us 0. Exit Cancel Send 22 22#235. DFF Pilot: Preliminary results • Contribution 5,3 % higher after interventions 250.0 Average growth customer base 200.0 in two periods similar Effect SMS messages limited because of frequent personal contact 150.0 . • Female customers save on average more than twice as frequent and also save more than male customers Regression analysis does not show a significant effect of income on contributions 100.0 50.0 0.0 15 9 3 P People's Pension Trust Cumulative daily contribution (appr 5 months) 61 65 after 20/11/2017 same period before 20/11/2017 85 68 93 97 101 105 109 23 113 ရာ PEOPLE'S PENSION HOLDING#24ရာ PEOPLE'S PENSION HOLDING 5. Opportunities for further research ● TP Can we build trust in a digital environment and a product that requires high level of interaction? People's Pension Trust • Can we realize long-term behavioral change by using visualization technics in combination with commitment devices? How can we heighten positive feelings associated with a comfortable future? Make saving feel rewarding in the present. • Introduction of mental accounting to reduce early withdrawals (emergency money, target saving, pension) 24#25Closing TP People's Pension Trust ရာ PEOPLE'S PENSION HOLDING Thank you for the opportunity to tell our story 25 25#26www.peoplespensiontrust.com www.peoplespensionholding.com