Draft pension policy set to pave the way to a secure old age

By FRANCIS AYIEKO

Posted  Sunday, May 24  2009 at  00:00

Kenya will soon have a national pension policy that, among other issues, will address the factors that hinder workers from saving for their retirement.

Retirement Benefits Authority chief executive Edward Odundo says the draft National Pension Policy has already been developed and is being scrutinised by the Finance Ministry before it is presented to stakeholders for discussions.

The policy is part of the regulator’s five-year strategic plan (2009-2014), which, among other things, seeks to increase the number of Kenyans saving for retirement from 15 per cent currently to 20 per cent by June 2014.

“One of the strategic objectives of the Authority is to have the policy fully implemented within the five-year period,” says Mr Odundo.

Finance Permanent Secretary Joseph Kinyua says the policy aims at increasing public awareness of the value of personal saving for retirement, advancing the public’s knowledge and understanding of retirement saving and its critical importance to their future.

It will also identify problems that workers have in setting aside funds for retirement, as well as single out the barriers that employers, especially small businesses, face in helping their employees accumulate retirement savings.

Mr Kinyua said the policy will also examine the impact and effectiveness of efforts by individual employers to promote personal saving for retirement among their workers.

The impact of government programmes at the state, provincial and local levels will also be addressed with the aim of educating the public on the need for saving.

Once developed, the policy is expected to make recommendations for the legislative and the executive arms of the government and for the private sector on how to “appropriately” promote private pensions and individual retirement saving.