Low pension savings expose two million retirees to poverty

The National Social Security Fund headquarters in Nairobi. Its membership stood at 4.2 million last year. FILE  NATION

By MUGAMBI MUTEGI,

In Summary

• Low pension coverage is pushing majority of about two million Kenyans above 60- years- old into poverty.
• HelpAge International says the number of Kenyans in this category will reach four million in a generation with a pension coverage of 11 per cent.
• The UK-based organisation this week released the Global Age Watch Index 2013 ranking 91 countries according to the comfort of their senior citizens.

Low pension coverage is pushing majority of about two million Kenyans above 60- years- old into poverty, an international NGO has said, making Kenya a difficult residence for the aged.

HelpAge International says the number of Kenyans in this category will reach four million in a generation with a pension coverage of 11 per cent, the same level as in Uganda and Rwanda.
The UK-based organisation this week released the Global Age Watch Index 2013 ranking 91 countries according to the comfort of their senior citizens.

HelpAge, however, did not conduct its research in Kenya this year, saying there was insufficient public material.

“Kenya is not featured in the Global AgeWatch Index due to a lack of international comparable country data on the old age poverty rate,” the organisation says on its website.

However, the organisation said Kenya would fare better than Africa’s average in some sectors based on the fragmented information available.

“For education and employment and enabling environment, the proportion of older Kenyans remaining in employment, 80.4 per cent, and reporting social connectedness, 82 per cent, is above the average for African Index countries.

In the health domain, life expectancy at age 60 in Kenya, at 17 years, is slightly below the average for African Index countries.”

In Kenya, 118,000 elderly persons get support under the social safety net programme, which began in 2004. Retirees receive slightly more through monthly pension payouts.

Early this month, the Treasury signed a Sh22 billion ($250 million) concessional loan with the World Bank to be used for cash transfers to poor households.

The amount is expected to supplement the Sh13.5 billion set aside by the Treasury this year for the extremely poor and vulnerable people. The elderly were to get Sh3.2 billion of this budgetary amount.

The intervention, however, has fallen into administrative hiccups with the government, saying it will not be rolled out until a credible way of identifying beneficiaries and disbursing the money is found.

(READ: Stipends for the poor delayed over fraud)

Most retirees in Kenya rely on the National Social Security Fund (NSSF) savings, which, due to low monthly contributions, have remained similarly little over the years.

The NSSF Bill 2012 plans to hike remittances for Kenyan workers to six per cent of gross salary that shall be set at four times the national average monthly wage with the employer remitting an equal amount.

(READ: NSSF monthly contribution set to go up fivefold)