Retirement planning must start early and remain consistent, pension sector players now say, amid a push to expand schemes to those in the informal sector and grow Kenya’s pension penetration rate.
The rate is estimated to be around 26 per cent, making it one of the lowest in sub-Saharan Africa, with a significant portion of the population, particularly those in the informal sector, lacking access to adequate retirement savings.
While the pension industry has seen growth in assets under management, with total Assets Under Management reaching a substantial Sh2.25 trillion as of December 2024, as per the Retirement Benefits Authority (RBA),a large segment of the workforce remains without a reliable safety net in retirement.
“The earlier individuals begin saving, the greater the benefits they enjoy due to the power of compounding,” Octagon Africa Group CEO, Fred Waswa, said.
According to Waswa, SMEs, startups, Jua Kali artisans, boda-boda riders, farmers and millions of hardworking people have for long lacked a path to a dignified retirement but this is changing.
“Inclusivity and accessibility are non-negotiable. A dignified retirement should not be a privilege reserved for employees of large corporations. Our solutions are designed for all, from SMEs to informal sector workers and are powered by digital tools that bring pensions closer to people’s lives through mobile access, simplified onboarding and tailored support,” he noted.
Waswa who spoke during Octagon Africa’s 18th anniversary noted that while policy frameworks such as the NSSF Act and Retirement Benefits Authority regulations lay a strong foundation, true impact is unlocked through private sector innovation.
RBA noted that Assets Under Management have increased by Sh276.5 billion, or 14 per cent growth, compared to the Sh1.9 trillion reported in June 2024.
“This impressive expansion was primarily fueled by robust investment income and increased member contributions,” the regulator said, mainly driven by the implementation of the National Social Security Fund (NSSF) Act of 2013.
The second phase of this implementation saw the lower contribution limit rise from Sh6,000 to 7,000 and the upper limit jump from Sh18,000 to Sh36,000, significantly boosting overall contributions.
