Retirement Benefits Authority (RBA) plans to increase pension coverage from 20 percent to 30 percent by year 2024.
RBA CEO Nzomo Mutuku in a speech read on his behalf by RBA Chief Manager Supervision Charles Macharia Monday during the launch of Cytonn Pensions Businesses in Nairobi said that 80 percent of labour force in Kenya were not saving for retirement.
According to Mutuku, the 10 percent increase is expected to come from informal sector workers who formed majority of the work force and yet has a low pension coverage of less than one percent.
Mutuku challenged Cytonn Asset Managers Limited (CAML) to focus their efforts beyond the employees and seek to design pension products that would help bring informal sector into the pension coverage.
“You need to join the RBA to support and create an enabling environment for you to be able to deliver your services effectively and provide solutions to retirees,” Mutuku said.
He further noted that to help Kenyans save for retirement, the authority it is set to grow horizontally and enhance long term savings which were useful for developing the Capital Market and the Authority’s long term projects.
“The industry has grown from Sh100 billion in the year 2000 to Sh1.2 trillion this year and in our new planning period, we target to double to Sh2.4 trillion,” Mutuku said.
Mutuku reiterated that the developments has been attained by the Authority’s effort to create awareness and also the support received from service providers like Cytonn.
“Timely development and opportunities for potential improvement need to be seized upon to enhance retirement benefits landscape. I therefore emphasize the need to embrace the use of technology to offer solutions for people who are saving for retirement because it has huge impact in the way pension funds operates,” Mutuku said.
Cytonn Pension Business unveiled three more products which are Cytonn Personal Retirement Benefit Scheme (CPRBS), Cytonn Umbrella Retirement Scheme (CURBS) and Cytonn Income Drawdown Fund (CIDDF) products to the market.
CPRBS which is designed to enable individuals to save for their retirement by making regular contributions into the scheme during their working years and grow their retirement savings with a retirement age of 60 years and CURBS targets organizations that do not have an occupational retirements benefit schemes or do not have the capacity to start one.
CIDDF cover provides individuals and members of Retirement Benefit Scheme an option to access their retirement benefits as a regular income through an investment fund upon retirement rather than taking up an annuity.
“The only challenge that we face as a firm is slow economy. We cannot run all our programs at once because of the nature of our market,” Dande said.
The move comes after the firm was recently granted a license to manage retirement benefit schemes funds by the Retirement Benefits Authority (RBA) in December 2018.