The Retirement Benefits Authority (RBA) has issued a stern warning to key government institutions over the non-remittance of pension scheme contributions. The RBA has identified county governments, state parastatals, and public universities as frequent offenders in this regard. Tom Kiptanui, a senior official at the RBA, emphasized the need for these institutions to devise effective strategies to resolve the ongoing issue of pending bills. "We are aware that some institutions have been struggling. We are engaging with them within our regulatory frameworks to encourage them to develop remedial plans to alleviate this burden," Kiptanui stated.
The RBA is hopeful that the recently formulated policy will invigorate the pension sector, which currently has a 26 percent coverage rate nationwide. Kiptanui highlighted the importance of this policy, noting, "The future of pension actually depends on this policy implementation. One thing that has come out is how to increase the coverage from the current 26 percent." The policy aims to address the challenges faced by the sector and enhance its growth and sustainability.
This development occurs amid calls from stakeholders in the pension sector for the government to introduce robust policies that would stimulate the multi-million shilling industry. Despite the low uptake of pension schemes in the informal sector, which stands at a mere 13 percent, industry players remain optimistic about a potential turnaround if favorable policies are implemented.
During the ongoing Zamara Pension Convention in Mombasa, Sundeep Raichura, the chief executive officer of Zamara, underscored the potential benefits of tax incentives for pension schemes. "We have proposed tax incentives to the regulator and we hope the regulator will consider that, because we need to work together through consultation to grow the sector together," Raichura remarked. Such incentives could provide significant relief to pensioners and encourage more individuals to participate in pension schemes.
The RBA's warning and the discussions at the Zamara Pension Convention highlight the critical need for collaborative efforts between the government, regulatory bodies, and industry players to address the challenges facing the pension sector. By implementing effective policies and providing incentives, the sector can achieve greater coverage and ensure financial security for retirees across the country.
