Octagon Pension Services Limited's managing director has hailed policy reforms in the country's pension sector, saying they provide a fertile environment to bring more people into coverage.
In an interview with the Star, Simba for instance cited the Retirement Benefits Mortgage Loans Amendment Regulations, 2020 which allows members of pension schemes to use up to 40 per cent of their saving to buy a residential house.
Additionally, RBA also rolled out the Post-Retirement Medical Fund, which means retirees will be better prepared to comfortably meet their healthcare needs and access hospitals of their choice.
''The policy will be instrumental in strengthening the legal and regulatory framework to achieve a comprehensive pension coverage across the formal and informal sectors and better protect the interests of beneficiaries and rights of pension contributors,'' Simba said.
According to him, all these measures will see the pension sector grow further to achieve and even surpass the target of Sh2.4 trillion in assets and a coverage of 30 per cent by 2024 as outlined in RBA’s 2019-2024 Strategic Plan.
Pension assets have grown substantially under the guidance of RBA since the year 2000. The assets are invested in the economy under various asset classes outlined in the investment guidelines.
Over the years, pension coverage has equally grown to about 22 per cent of the labour force from a paltry 12 per cent in the year 2000.
He urged industry stakeholders to continue lobbying for policies that will make pension favorable for informal workers who are largely left behind.
In 2019, Octagon Pension Scheme launched an innovative digital pension scheme to give workers in the informal sector a platform to save for their retirement.
Dubbed Mobikeza, the product allows contributors to make unlimited deposits and periodic withdrawals via USSD or an app.
It caters to the youth, Juakali artisans, and workers in Micro-Small and medium-sized Enterprises (MSMEs) that lack a means of saving for their old age.
''Low pension uptake has been due to premium pension plans, way too high for workers with uncertain incomes,'' Simba said.
The product has since surpassed its target to register one million workers within one year with individuals saving as little as Sh1 through their mobile phones.
Last month, Octagon and Jubilee Health Insurance rolled out an affordable and flexible post-retirement medical cover to retirees of up to 85 years.
Dubbed ‘Octagon Afya Plus’, the comprehensive medical cover will be available to Octagon Africa customers and will be underwritten by Jubilee Health Insurance.
Other than accessing inpatient and outpatient services, those covered will also be able to access highly subsidized services in dental, optical and last expense.
