The National Treasury and Economic Planning has invited the public and stakeholders to familiarize themselves with the National Retirement Benefits Policy, a document that aims to bring mostly those in the informal sector to retirement benefits schemes.
In a public notice, the National Treasury said this policy provides a framework for the harmonization, coordination, governance, growth, and development of the retirement benefits sector to ensure affordable, adequate, and sustainable retirement benefits in old age.
The policy seeks to achieve the following objectives:
- Coordinate and harmonize the existing legal and regulatory framework to integrate various legal provisions governing the retirement benefits sector.
- Enhance retirement benefits coverage.
- Provide mechanisms of good governance and sustainability of the retirement benefits to promote growth and diversification of retirement benefits funds investment.
- Promote and facilitate portability of retirement benefits between schemes and across borders.
- Promote and facilitate innovation in the retirement benefits sector.
- Promote affordability and adequacy of retirement benefits for workers.
- Regulate retirement benefits payout phase.
- Promote Post-Retirement Medical Benefits and old age care.
- Establish sub-funds for members when saving for retirement.
Data from National Treasury shows that the retirement benefits system currently covers a paltry 26% of Kenya’s labour force. This low coverage is attributed to the labour market structure, low compliance levels with the National Social Security Fund(NSSF) Act, low financial literacy, among others.
According to National Treasury CS Prof Njuguna Ndung’u, the current retirement benefits system is fragmented and excludes those in the informal sector. Those already in formal schemes suffer inadequate benefits, have no medical insurance, have their benefits not portable, among other challenges.
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