There are three kinds of pension funds or schemes in Kenya; Pension funds, Provident funds and Individual Pension funds or IPP’s. FILE PHOTO | SHUTTERSTOCK
A new report ranking Kenya’s retirees among the poorest globally has highlighted how an ineffective pension system forced senior citizens to continue working well into their retirement years.
The report by Allianz, an international financial services provider, notes that Kenya’s pension system does not provide an adequate standard of living in old age, leaving most of those aged 65 and above in penury compared to their peers in other countries.
This damning verdict comes at a time when there has been a push to increase the pension contribution by workers to the National Social Security Fund, a provident fund, from the current monthly payment of Sh200 to Sh1,080.
The meagre retirement benefits, according to the report that surveyed 75 countries including five in Africa, are due to the inability of local pension schemes to mobilise adequate funds, a lack of a legal mechanism to delay retirement and the absence of a proper ratio between the current and future pensioners.
The report underscores the importance of the country protecting the ongoing pension reforms from corruption to ensure mass buy-in from the majority of the population to give it a better chance of success.
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