All Kenyans could soon be forced to save for their retirement after the Association of Pension Trustees and Administrators of Kenya (APTAK) petitioned the government to make retirement schemes mandatory.
While addressing the media on Wednesday, February 23, APTAK president Hosea Kili, stated that there was concern among various stakeholders noting that only 20 per cent of Kenyan employees save for their retirement.
He explained that the mandatory pension scheme would be achieved through similar legislation to the NHIF (Amendment) Bill 2021 which made health insurance mandatory for all Kenyans.
“We expect to have universal social security coverage, but for now we are encouraging people to save more money on the pension scheme, and not only investment but the membership will go up to 25 percent, but if the government intervenes, it will be 100 percent.
“We are currently pushing the government to do for the pension sector what happened in the health sector where saving for universal health is mandatory," he stated.
Additionally, Kili explained that most people who work in the informal sector would also benefit from the scheme adding that many businesses have been affected by the harsh economic times.
"Only 20 percent of the employed citizens save, the rest who are unemployed are nowhere to be seen,” he stated.
Kili further revealed that their push is informed by the global pandemic which pushed many employers to declare a number of their employees redundant.
“This has actually given us a lesson that in the future we may need to have another saving arrangement which is tailor-made and not for retirement but for managing crisis.
“If all Kenyans were covered in pension arrangements, at least a portion could have been withdrawn by some members to cushion them during the time of the pandemic,” he explained.
Currently, a majority of Kenyans in the formal and informal sector make monthly contributions to the National Social Security Fund (NSSF). Monthly contributions to NSSF range from Ksh380 to Ksh1,080 monthly.
Upon retirement, NSSF gives money to its members monthly. The retirement age for Kenyans working in the government is 60 years.
