Pension companies have asked the government to review policies governing the scheme to align with technology and the saving habits of the Gen Zs.
Speaking to the media in Mombasa during the 15th Pension Convection by the Zamara Group, the Chief Executive Officer (CEO) Sandeep Raichura said that there has been unprecedented transformation that has far reaching implications on financial sustainability and relevance of the pension structure.
Raichura said as Zamara Pension Group, they have plans to modify the retirement scheme to be Gen Z friendly, highlighting that the current generation required a system that is relatively instantaneous as compared to the current system.
He noted that the organization seeks to make its pension systems more relevant to the new generation through the use of technology including Artificial Intelligence (AI).
He said it is now time for the regulator to come up with modern pension systems since there is a lot of change and transformation in the world when it comes to saving plans.
“We need to ask ourselves these questions like how can we make sure our pension systems remain relevant, resilient in the future, and more inclusive. There is a need to look at how we can leverage on innovation so that pension savings can be cheaper, and spend less in managing retirement benefits,” he said.
“The pension infrastructure that we have in Kenya is solid hence if we can accommodate wider savings priority to our pension systems, this would be a good step in making our system more appealing to the people looking for something different,” added Raichura.
He said that the Finance Bill 2024 that was withdrawn had a lot of changes in the pension system whereby there was a significant change that was made in tax deductible limit on pension contribution, which for the last 20 years, the ceiling on tax deductible contributions was Sh20, 000, but with the finance bill 2024 it was raised by 50 percent that is Sh30, 000. “This would have significantly intensified pension saving in the country,” he noted.
Additionally, he highlighted that the organization is working on helping the people to see the power of each interest or the accumulation of small amounts of money and how it could make a significant impact in their future.
Themed “Building innovative and resilient pension systems for a changing world,” the three-day forum saw over 200 delegates coming together to look into solutions and transformation in the pension systems.
Raichura further called on the government to reduce the extent of profit and funds in the country thus more of the benefit should be paid in the form of a regular income in retirement.
He noted that according to research, most of the people tend to spend all their money in a very short span citing a span of three years’ maximum hence leaving them stranded.
“For people who are retiring or exiting from Zamara database, we encourage for people to look at different options such as taking an annuity from an insurance company or looking at an income drawdown which is a phased withdrawal of their benefit from a scheme so that they are not taking everything at once,” urged Raichura.
Zamara Pension Manager Antony Kilavi said that the Pension Convention 2024 is aimed at building initiative and resilient pension systems.
He said they were focusing on the younger segment of the population in the country, working with them in order to empower them financially.
By Chari Suche and Nuru Soud
