Preference and choice for micro pension scheme: evidence from estate sector in Sri Lanka

This study reports important information on the preference and choice of a micro pension scheme from estate sector employers in Sri Lanka. The contingent valuation method (CV) was used to elicit participants’ willingness to pay for the hypothetical micro pension scheme. For product preferences, a conjoint analysis was conducted to study their relative importance and to discover the relationships between different attributes and the characteristics of the respondents. The results show that participants’ interest in joining the micro pension scheme is 92% (SD=2.7%) overall and there was a significant relationship between the willingness to pay of respondent and their demographic and socio-economic characteristics. The findings vividly demonstrated the complexity of the preference context and pragmatic barriers for participation to uniform the pension scheme. Flexibilities in micro pension schemes will increase the access and affordability of the estate sector employers. Designing an appropriate delivery system through microfinance institutions is vital for financial inclusion of this segment. The results of this study may also have important implications for financial planning professionals.