Alexander Forbes vuna pension plan records Sh1.4b in asset

NAIROBI, KENYA: Alexander Forbes vuna pension plan has registered exponential growth since its inception 6years ago to record Sh1.4 billion in asset. The individual retirement scheme which was awarded as the best individual Pension Plan by Think business investment last month has also attracted 27 participating employers and over 2,200 members.

Alexander Forbes Group Chief Executive Officer, Sundeep Raichura who was also awarded for his individual outstanding contribution in the pension industry attributed the steady growth of the scheme to reliable contributions and positive returns achieved by the fund.

Addressing the scheme members during the 6th annual general meeting at a Nairobi hotel, Raichura said individual pension plans are very important for every Kenyan since the government does not offer a universal social security programme for its people.

He said majority of Kenyans disregard saving for retirement from an early age which affect their sunset years due to pressure on disposal incomes and more demanding priorities such as housing and medical insurance.

“Many young people in this country generate good income to make adequate savings however, they prefer spending it on luxurious lifestyles with little or no regard to saving, there’s need to change this attitude by seeking expert advice on financial management,” Raichura urged.

Currently statistics from the pension industry shows that Kenya has about 84 per cent of the informal sector and 80 per cent of the formal sector do not have pension. Personal pension plans are suitable for the self-employed and employees who desire to save for their retirement particularly when they do not belong to any retirement benefits scheme.

With a personal pension, one remits a monthly payment or a lump sum to pension providers who invest the money on behalf of the pensioners. The final worth of the pension fund usually depends on one’s accumulated contributions and performance of the fund.

“There is need for us to conduct massive awareness campaign on the importance of safeguarding our future from an early age through forums that promotes saving since contributions made earlier in life have a longer time to multiply and higher interests that could sustain old age,” he added.

 Alexander Forbes division head Angela Okinda, said Vuna pension plan is a retirement benefit plan that is designed to assist individuals and groups to build up retirement capital in a tax efficient way, in order to provide retirees with an income during retirement.

“Vuna pension plan allows members to retire at any age after 50 years but earlier than 75 years offering various benefits such as flexible contributions and optimal investment returns to members”, she added.

She said that even though short term cash investments can be safe but people need to be encouraged to pursue long term saving as cash returns cannot beat those of a balanced portfolio comprising of shares and bonds.