Pension contribution should be mandatory for all citizens to avert a future crisis where a large segment of the elderly would be depending on government stipend.
Industry stakeholders say with improved health services, the average age of Kenya’s population is bound to increase.
“There is urgent need to extend pension coverage to the informal sector, especially with 85 per cent of the workforce in the sector not covered,” said Zamara Group Chief Executive Sundeep Raichura during a conference organised by the firm in Mombasa this week.
He called for bolder policy measures including making pension contributions compulsory and increasing tax breaks for the pensions sector.
“An informal sector worker has a higher need than one in the formal sector to be protected against loss of income-earning capacity in old age,” said Mr Raichura.
Retirement Benefits Authority Chief Executive Nzomo Mutuku said whereas the pensions sector was hard-hit by the Covid-19 pandemic, the industry still registered growth to cross the Sh1.4 trillion mark in assets.
He urged pension fund trustees and providers to consider innovating new products to enable Kenyans to benefit from the favourable regulations implemented by the industry regulator.
More than 250 delegates including trustees from over 100 retirement funds, regulators and industry investors attended the conference, which addressed critical questions on how pension funds can thrive and be more impactful in a post-Covid-19 world.