The scheme to be introduced before the end of the year aims to increasing the number of people under pension schemes by more than five million.
RBA Chief Executive Officer Edward Odundo said on Friday that the new scheme will give those in the sector an opportunity to save regularly for a reliable and long-term retirement income.
“Saving for retirement is important. This is because it reaches a point in everyone’s life where one’s productivity diminishes due to old age or incapacitation,” Odundo said on the sidelines of this year’s RBA Open Day.
Odundo said the scheme will enable members to enjoy the generous income tax relief available to members of a registered retirement scheme adding that the pension scheme is targeting over 50,000 people.
The CEO said that the authority had already held talks with the Matatu Welfare Association and the Matatu Owners Association and had completed the drafting of a trust deed and appointment of trustees for the scheme.
Under the scheme, MOA will contribute Sh30 a day while employees will contribute Sh20 bring the total contribution to Sh50 a day.
The scheme for the sector will follow one launched five months ago for the jua kali workers aimed at providing them with a safety net upon retirement where those involved are required to save as little as Sh20 a day.
According to RBA, the savings can also be used as collateral to access mortgage facilities.
Odundo said the new pension scheme opens up retirement savings to the majority of workers who have not been able to put aside some money for future use as the pension schemes have been restricted to employed people who are required by law to make monthly contributions through employer check-off system.
Pension uptake has slowly been gaining traction in the country growing from an Sh86 billion industry, in 2001 to Sh451 billion in assets at the end of December 2010.