Connect with us

Hi, what are you looking for?

Capital Business
Capital Business

Kenya

Tough times for Kenya pension schemes

NAIROBI, Kenya, Aug 5 – An expert in the insurance industry has warned Kenya’s pension schemes were at great risk due to the dire economic constrains being experienced by contributors.

Citing the ever increasing cost of living, high inflation rates, increasing food insecurity, high taxation and a slowing economic growth that has seen a number of people lose their jobs, UAP Insurance General Manager Stephen Maina warned that most individuals will be forced to withdraw their pension savings before retirement.

Speaking to Capital Business on Wednesday Mr Maina said such a move would have negative repercussions for individuals, companies and the public at large.

“These accumulated funds are what is usually used to invest in various developmental financial structures like Treasury Bills and Bonds that stir different economic activities within the economy,” Mr Maina noted.

He has proposed that the government cushion individuals from the current harsh economic environment by reducing on direct taxation and focusing more on indirect tax.

“Studies carried out time and again have shown that Kenyans are one of the most highly taxed population, (a situation) that the government needs to do something about to stop people from getting tempted from dipping into their retirement funds during these hard times,” he pointed out.

The expert further noted that under current legislation it’s not mandatory for companies to set up pension schemes for their employees an option that may become more popular in the current economic times.

As it stands now, individuals are allowed to access their contributions from pension schemes whenever they want but can only access the employers’ contribution once they attain the retirement age.

A past proposal to change the law to make it impossible for individuals to access the funds until they attain retirement age was met with huge resistance from the masses.

Advertisement. Scroll to continue reading.

Mr Maina is calling for increased awareness campaigns to educate the public on the importance and the need to save for retirement.

“Global statistics indicate that life expectancy should rise from 60 to 70 years due to better medical facilities, increased awareness and better technology,” the expert observed.

“It’s important that when this happens people have money to live on as opposed to living from hand to mouth.”
 

Click to comment
Advertisement

More on Capital Business

Executive Lifestyle

NAIROBI, Kenya, Mar 12 – The country’s super wealthy individuals are increasing their holding of bonds, gold and cash, a new report by Knight...

Ask Kirubi

NAIROBI, Kenya, Mar 9 – Businessman and industrialist Dr. Chris Kirubi has urged members of the public to exercise extreme caution when making any...

Ask Kirubi

NAIROBI, Kenya, Mar 24 – Businessman and industrialist Dr. Chris Kirubi is set to own half of Centum Investment Company PLC, following a go-ahead...

Ask Kirubi

It is without a doubt that the COVID-19 pandemic has caught the whole world by surprise. Although its full impact is yet to be...

Headlines

NAIROBI, Kenya, Mar 18 – Commercial Banks have been ordered to provide relief to borrowers on their personal loans, with loans eligible from March...

Kenya

NAIROBI, Kenya, Jun17 – Kenya’s tea leaves manufacturer Kericho Gold, has been awarded the Superbrands Seal by Superbrands East Africa for their quality variety...

Coronavirus

NAIROBI, Kenya, Apr 13 – As the local telecommunications industry gears up to roll out 5G networks in the country, the Communications Authority of...

Coronavirus

NAIROBI, Kenya, Mar 22 – Airtel Kenya is offering free internet access for students in order to enable continued learning at home in the...