Pension Fund Trustees and stakeholders of the Pensions Industry have been urged to further enhance and improve the retirement benefits framework in the country in a bid to woo both the informal and formal sectors into saving for retirement.
From a recent publication of the Zamara Kenya Pensions Watch 2022, the coverage of the current pension in Kenya is hovering around 17.7% of the total employed population in Kenya and a staggering 83.2% of employed Kenyans in the informal sector have no access to any form of pension savings.
Speaking at the official opening of the two-day Pension Trustee Seminar organized by Zamara, Prof. George Magoha said that there was a need for further enhancement and improvement of the retirement benefits framework in Kenya by ensuring wider coverage across the working population and especially the expansive informal sector that very sadly remains excluded in saving for retirement. “There is a need to increase the levels of savings in both private sector and public sector retirement benefit arrangements to ensure that those covered receive an adequate benefit that will cover their basic needs when they retire”, he said.
On his part, Zamara Group Chief Executive Officer, Sundeep Raichura said, The provision of retirement benefits is limited to the public sector workers and the private sector is slow in rolling out such benefits, not to mention the informal sector that has completely been left out. The provision of retirement benefits should be a universal basic need and there is a need for further enhancement and improvement of the retirement benefits framework in Kenya to make it more inclusive.”
The Zamara Kenya Pensions Watch 2022 shows that the median age of the Kenya population is at 20.1 years but there are 2.2 Million Kenyans aged above 60 years as of 2021 and this figure will nearly triple to 6.3 Million Kenyans aged above 60 years by 2040. The expected increase in the aging population in Kenya presents a formidable social economic challenge for Kenya and makes it imperative for the country to put in place a broad and appropriate retirement benefits framework that will ably respond to the challenge by increasing both the quantum of savings as well as the level of coverage for savings in the formal and informal sector. In addition, the public and private sectors need to do their part to ensure that their employees are adequately prepared for retirement.
The second such conference held this year by Zamara seeks to lay ground in understanding how each industry player can help the member retire better. Themed Putting the Member in Focus, the conference, slated to take two days, will see the industry players dig into trends and insights on pension adequacy, investment, and contributions and share the progress of the industry in Kenya.
The conference also provided a platform for experts as well as major industry players to network, and share experiences on the emerging trends and happenings within the insurance sector that has witnessed noticeable growth however retirement benefits arrangements continue to raise questions even as members retirement age yearly and continue to have expectations about what their scheme should be doing for them.