Educate citizens on pension saving

As 2012 begins, many of us delve into the New Year with various resolutions, but the question we forget to ask often is where the pension savings plan falls on our scales of preference. Is it a priority? Pension savings is an issue that concerns everyone. We all know when we retire, we need even more funds to sustain our previous lifestyles. But for some reason we never ever think about it. The concept of retirement to many doesn’t involve pension schemes, rather savings for assets; houses, land and cows, but, then, again, what is the percentage of Kenyans that can afford to acquire these assets? Most of us convince ourselves that retirement is too far away so why worry about it now.There is negative perception associated with retirement, even dreaded and considered not trendy for the young, one thing we forget is that we take an extra step towards retirement every single day of our working life, and that retirement is not a ticket to our graves.The traditional social fabric where parents depended on their children to take care of them once they retired is one of the reasons we don’t save for retirement. But we should note that most of Kenyan youth still depend on their parents even when they are age 30. Negative perceptionOther reasons are low levels of awareness on retirement benefits products, low financial literacy, aversion to long-term savings, desire for accessible savings, negative perception of the insurance industry and financial sector, low levels of income to fit this economic hard times and last, finance is viewed as a taboo topic never discussed among many families.According to Dip-Stick survey commissioned in March 2009 to ascertain the level of awareness on the importance of saving for retirement among Kenyans, it was discovered expenditure is prioritised to saving in the following order: Rent, food, household bills, transport, church offerings, clothing, entertainment, savings (last not considered a priority and can be done away with.Since the issue of pension savings is voluntary, making it compulsory is the first solution to correct this wanting situation and achieve a home-grown social protection system. Other remedies entail educating the public on retirement benefits products available in the Kenyan financial markets like insurance companies, banks and Saccos among others. Demystifying the pension subject, since most Kenyans have either a wrong perception of what pension entails, whom it serves best and/or when to start saving, it will be important to correct this notion and let Kenyans know that pension savings has nothing to do with being trendy or not but rather it is for our social security and very important in sustaining our current lifestyles come retirement age. Individual plansPenetration of the informal and private sectors of employment, business owners can sign up for individual pension plans while employers on the other hand can take the responsibility to drive the pension agenda for their employees in a way that if the Government through Retirement Benefits Authority and other concerned retirement regulators effect compulsory pension contribution, just like NHIF and NSSF, employers may then ensure employees sign up and then facilitate deductions for contributions. This would make it cheaper and even a more disciplined way of saving.The Government can also contribute to this endeavour by effecting tax exemptions for people above 65 years and organising retirement planning seminars to equip citizens with investment and social skills to help them cope with life after retirement.All said, the power of change begins at an individual level. As the RBA and the Government try to regulate and control insurance companies and other financial institutions retirement schemes, everyone should take the initiative to join a pension savings plan.{Annette Tindi Muchimuti, Nairobi}

Educate citizens on pension saving

Get Full Access for Ksh299/Week.

Stand With Bold Journalism.
Stand With The Standard.

Related Topics

Popular this week

Latest Stories

The Standard Insider

Digger Classified

GET OUR NEWSLETTER

CONNECT WITH US

FOR THE LATEST JOB ADVERTS

DIGGER JOBS

Digger Motors

Digger Real Estate

Educate citizens on pension saving

Get Full Access for Ksh299/Week.

Stand With Bold Journalism. Stand With The Standard.

Related Topics

Trending Now

Popular this week

Latest Stories

The Standard Insider

Digger Classified

GET OUR NEWSLETTER

CONNECT WITH US

FOR THE LATEST JOB ADVERTS

Stand With Bold Journalism.
Stand With The Standard.