About 15 million Kenyans who are eligible to make saving towards retirement benefits are not enrolled with any pension scheme, the National Social Security Fund (NSSF) has revealed.
The Fund’s Managing Trustee Antony Omerikwa observed that most pension schemes registered by the Retirement Benefits Authority (RBA) focused on covering employees of state corporations, companies and individual owned organizations.
Omerikwa stated that though the bulk of Kenyans were engaged in the informal sector, pension schemes in the country had done little to create products and awareness campaigns towards encouraging them to make savings in order to achieve economic empowerment in retirement.
The MD spoke in Nakuru Friday, where the fund launched a product dubbed ‘haba haba’ that is fashioned to enable workers in the informal sector make contributions towards their retirement through a mobile phone platform.
NSSF is the first pension fund to come up with the plan that targets over 15 million Kenyans working as market vendors, Jua kali artisans, matatu drivers, boda boda operators and athletes.
The product which will be rolled out in all the 47 Counties in the coming weeks is a partnership between NSSF, Telco Company Safaricom, National Hospital Insurance Fund (NHIF) and Kenya Commercial Bank among others.
Omerikwa said the product had been crafted to be flexible and affordable as those who will subscribe to the new saving scheme will pay as low as Sh. 25 daily from the comfort of their homes and business using a Short Message Service Code.
Treasury Chief Administrative Secretary Nelson Gaichuhie said informal sector workers lacked a saving culture for retirement which led to collapse of their businesses in old age due to financial constraints
He noted that the Treasury fully supported the initiative targeted at economically empowering them, as the informal sector contributed 64 percent of the Gross Domestic Product.
The CAS encouraged other Occupational Pension Schemes to come up with products that will benefit Kenyans who are not in regular salaried employment.
Gaichuhie advised women and youth to subscribe to the product as it will guarantee that they achieve economic empowerment in future.
He noted that the since product will inculcate a culture of saving among women and youth, it will also encourage them to be responsible.
Principal Secretary Ministry of Labour and Social Protection Peter Tum said the product will encourage most Kenyans to have a dignified retirement life.
Tum observed that Kenyans engaged in the informal sector rarely planned for their future and that there was urgent need for public awareness programmes to change their attitude.
He said since independence there had been no pension scheme that had taken into consideration the needs of self-employed Kenyans, which had led to the official social protection programme being overstretched.
By Jane Ngugi and Dennis Rasto