The National Treasury and Economic Planning has extended an invitation to the public and stakeholders to acquaint themselves with the National Retirement Benefits Policy. This document is designed to primarily include individuals in the informal sector into retirement benefits schemes.
The Treasury emphasised that this policy serves as a blueprint for the alignment, coordination, governance, expansion, and enhancement of the retirement benefits sector. Its objective is to guarantee accessible, sufficient, and enduring retirement benefits for elderly individuals.
Data provided by the National Treasury indicates that only a meager 26% of Kenya’s workforce is currently covered by the retirement benefits system. This lack of coverage is attributed to various factors such as the structure of the labor market, poor adherence to the National Social Security Fund (NSSF) Act, and insufficient financial literacy, among others.
National Treasury Cabinet Secretary, Professor Njuguna Ndung’u, highlights that the existing retirement benefits system is fragmented and does not include individuals in the informal sector. Moreover, those already enrolled in formal schemes face challenges such as inadequate benefits, absence of medical insurance, and non-portability of benefits.
The policy aims to achieve several key objectives in the retirement benefits sector. Firstly, it seeks to streamline and integrate the existing legal and regulatory framework governing retirement benefits, ensuring cohesion and efficiency.
Additionally, the policy aims to expand the coverage of retirement benefits, extending support to a greater portion of the workforce. It emphasises the importance of good governance and sustainability to foster growth and diversification of retirement funds investments.
The policy also prioritises the facilitation of portability of retirement benefits, both within schemes and across borders, to provide flexibility and security for members. Furthermore, it aims to encourage innovation within the sector while ensuring affordability and adequacy of retirement benefits for workers.
Regulation of the payout phase of retirement benefits is highlighted, along with promoting post-retirement medical benefits and old-age care. Lastly, the establishment of sub-funds for members during their retirement saving process is emphasised, enhancing individual financial security and well-being.
