The increased employees’ contribution to National Social Security Fund (NSSF) will be of benefit to the workers when they retire according to the Retirement Benefits Authority (RBA) CEO, Charles Machira.
The contributions will be increased from Sh2,160 to Sh4,320 this February as per the new NSSF Act.
Speaking in Nyahururu Town during the 8th annual MINET Kenya pension conference, the RBA CEO, said the contribution to NSSF is of benefit to the worker since the employee will take home good pension money.
He at the same time defended the increment in NSSF contributions citing that the tenfold will be an advantage to the employee to have a decent retirement package.
He lamented that the country does not have an optimal number of people saving for their retirement. Despite this, he said the retirement benefits sector is stable.
Macharia added that the industry has an asset management of gross value of over Sh1.7 trillion and these resources have been saved by 1050 pension funds in Kenya.
“The pensions sector continues to face challenges, some of which the regulator is working on such as unremitted contributions by employers currently estimated to be at Sh 40 billion.
“Pension funds ought to embrace environmental, social, and governance principles as a measure of sustainable business practices and continuity”, said Machira.
Moreover, he said that the RBA policy will address some challenges which include delayed payment of benefits among others.
On his side, Daniel Mainga the General Manager of MINET, Financial Services and Pensions said that this year’s pensions theme is sustainability and resilience and the sustainability of the pensions industry is a must-have conversation.
He said they are aligning with the changes in the industry to ensure the employees in Kenya go home with a decent pension.
He regretted that it is unfortunate many people retire with minimal pensions that cannot sustain them after working for many years.
He said that he was in support of the increased pension funds both on the employee and employer deductions
He called to action all the industry players to ensure there is sustainability and the amount reasonable to support the pensioners.
The CEO of The Institute of Economic Affairs Kwame Owino led the discussion on the appraisal of the macro environment, geopolitical risks, and outlook affecting the pensions sector in Kenya.
However, Kwame noted that the risk of a global recession in 2024 remains low, while Kenya’s economic risks are mainly domestic, propelled by inflation and debt
“There are opportunities for pension funds to diversify their investments among them the education sector which provides opportunities for high return, based on the demand for learning facilities”, said Kwame.
The conference whose theme is sustainability strategies fortifying resilience and igniting change ends on Friday, the 19th.
By Antony Mwangi
