Speaking at the official opening of a two-day Pension Conference organized by Zamara, the Group’s CEO, Sundeep Raichura called for bolder policy measures including making pension contributions compulsory and significantly increasing the tax breaks for the sector.
“The monetary limit on tax-deductible pension contributions has remained at Sh20,000 per month for the last 18 years and this needs to be significantly increased or removed to increase long-term savings in the country,” said Raichura.
He added that there was an urgent need to extend pension coverage to the uncovered informal sector especially with 85% of the workforce in the informal sector.
Revenue Benefits Authority Chief Executve Officer Nzomo Mutuku said that whereas the pensions sector was hit with the Covid-19 pandemic, the industry still registered growth to cross the Sh1.4 trillion mark.
Mutuku urged pension fund trustees and providers to consider innovating new products to enable Kenyans to 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 need communication beyond their benefit statements if they are to better plan their retirement, ” said Mutuku.
The two-day conference attended by more than 250 delegates including trustees from more than 100 retirement funds, regulators and industry players addressed critical questions on how pension funds can thrive and be more impactful in a post-Covid-19 world.