Kenyan pensioners are not only grappling with old age poverty, but they have to contend with a large number of dependents as the unemployment crisis forces their adult children to continue relying on them for support.
According to the Pensioners Survey 2024 report by the Retirement Benefits Authority (RBA), 83 percent of retirees have dependents.
The survey shows that 51 percent of the dependents are male, with 45 percent of the pensioners providing daily upkeep and shelter, 34 percent covering school fees, and seven percent incurring other expenses.
Additionally, the report released this month paints a grim picture of those still in employment as only 26 percent have pension coverage, exposing 74 percent of workers to old age poverty.
RBA Chief Executive Charles Machira said the pension industry has plenty of room for growth as Kenya seeks to boost retirement savings to secure the future of retirees.
"Retirement benefits industry has grown from Sh40 billion 25 years ago to Sh2.25 trillion as of last December. The industry is growing and we expect the trend to continue," he said during a media briefing in Naivasha at the weekend.
RBA aims to increase total pension assets to Sh3.4 trillion and achieve a coverage rate of 34 percent by 2029 through its 2024–29 strategic plan.
RBA has proposed legislative and policy changes to boost pension coverage and tackle some of the challenges the industry faces.
“If we make all employers contribute to a scheme, the number of contributors to the pension funds will increase from 3,200 to 75,000. Some are compliant some are not,” he said.
Citing the Business Registration Service, Mr Machira said the more than 420,000 registered enterprises make a rich pool of employers, which could be tapped to boost the pensions industry.
“There is a big potential if the number of compliant employers increases to over 100,000. We must find ways and means to bring more people into this space, especially with the latest technological advances, including creating sandboxes to test products, for instance, those tailored for youth in the gig economy,” he said.
RBA’s legal and policy changes in the pipeline include possibly working with the Kenya Revenue Authority to boost remittances of worker contributions and holding employers liable for not remitting funds collected, instead of the current practice that targets scheme trustees.
Mr Machira said RBA is eyeing amendment to the law to lock in retirement benefits by reducing workers’ access from the current 50 percent to 40 percent of pension savings.
According to the survey, the unremitted pension contributions stood at Sh72.2 billion as of last December with 98 percent of the defaulting employers being in the public sector, especially the county governments and universities.
