Agency wants pension membership made compulsory

National Social Security Fund, Nairobi, Kenya [Photo Courtesy]

A pension fund administrator is lobbying the Government to amend article 43 of the Constitution to make it mandatory for all Kenyans to contribute to a pension scheme.

CPF Financial Services, formally Laptrust, wants the constitutional provision that currently only demands the State provide social security to its citizens, amended to compel Kenyans in both informal and formal employment to contribute to a new fund to be set up by the National Treasury.

Occupational schemes

CPF Managing Director Hosea Kili said yesterday that in Nairobi, only 15 per cent of Kenyans were covered by funds, out of Treasury’s target of 70 per cent. “When you look at the National Social Security Fund (NSSF), only formal employees are covered in that scheme. Besides, NSSF has many governance problems that put off many Kenyans,” he said.

“Other occupational schemes that companies take up only cater for formal employees, meaning a big chunk of Kenyans remains without a pension.”

Only 10 per cent of Kenyans in the informal sector are members of a pension fund.

This group is covered through voluntary pension schemes.

Mr Kili also weighed in on the raging debate on whether fund trustees should be paid for their role in the governorship of a fund.

He said the Retirement Benefits Authority (RBA) should train trustees to equip them with the skills to govern a fund.

“Trustees should be paid for the work that they do. However, RBA should train them since many don’t understand the workings of a pension fund,” said Mr Kili.