The government has been urged to spearhead growth and further develop the pensions industry through bolder policy reforms to build back a more resilient and inclusive pensions industry post-COVID-19.
Speaking at a Pension Conference, Zamara Group Chief Executive Officer, Sundeep Raichura called for bolder policy measures including making pension contributions compulsory, thus increase tax breaks significantly for the sector.
“The monetary limit on tax-deductible pension contributions has remained at Ksh 20,000 per month for the last 18 years and this needs to be significantly increased or removed to increase long-term savings in the country”. Raichura said.
“We can increase long-term domestic savings critical to fuel economic growth and create jobs much faster if we implement bolder pension reforms of the type that several countries in Africa such as Ghana, Nigeria and Malawi had implemented.” He added.
Raichura further said that there was urgent need to extend pension coverage to the uncovered informal sector.
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“An informal sector worker has as much if not higher need than their formal sector counterpart to provide for or be protected against the loss of income earning capacity in old age”, he said.
Retirement Benefits Authority (RBA) CEO Nzomo Mutuku who was also present acknowledged the industry registered a growth despite the sector being hit by COVID-19 pandemic.
Mutuku urged pension fund trustees and providers to consider innovating new products to enable Kenyans benefit from the favorable regulations implemented by RBA.
He lauded pension trustees who had included provision for post-retirement medical savings in their schemes especially given the plight of retirees without medical cover.
He also decried the lack of effective communication to pension fund members.
“Pension fund members need communication beyond their benefit statements if they are to better plan their retirement” said Mutuku.