State-backed pension scheme targets more than 15 million informal workers

A State-backed pension scheme targeting over 15 million informal sector workers is set to be rolled out this financial year.

This will see government restructure the M-Akiba retail infrastructure bond to secure the pension investments for the workers.

Treasury Cabinet Secretary Ukur Yatani said the pension scheme dubbed, Kenya National Entrepreneurs Savings Trust had now been registered, a move that aims to boost Kenya’s low pension penetration which is below 20 per cent and mainly held by the formal sector.

“To operationalise the scheme, the government is restructuring the M-Akiba bond platform for safe and secure investment for the unique heterogeneous informal workers. To this effect,  Treasury is working with stakeholders in the financial sector to roll out the scheme across the 47 counties in this financial year,” Yatani told Parliament yesterday.

This was during the unveiling of the Sh3.3 trillion 2022/2023 Budget which is President Uhuru Kenyatta’s last spending plan.

This is as Treasury CS revealed that government will in the next financial year institute pension reforms aimed at quickening benefits and taming a ballooning retirees’ wage bill.

Mr Yatani said the payroll for the public service pension continued to grow to over 300,000 pensioners and dependents as of December 2021.

He said the State would roll out the re-engineered pension management system in the year. “The system will offer an end-to-end Enterprise Resource Planning solution in the management and processing of pension benefits,” Yatani said.

He said the pension wage bill would ease owing to the Public Service Superannuation Scheme that was operationalised in January 2021. The scheme has attracted more than 352,000 members with a fund value of Sh27 billion.