Alexander Forbes Retirement Fund has urged the Treasury to make it mandatory for Kenyans to save for retirement to enable them to live comfortably after their working life.
The fund says only 22 per cent of Kenyans are able to live comfortably on post-retirement income against the global standard of 66 per cent.
This leaves out millions of people at the mercy of relatives and friends, who are forced to foot their medical bills and other basic needs.
Speaking during the 10th annual general meeting of Alexander Forbes Retirement Fund, the firm’s Divisional Head of Umbrella and Retail Solutions, Angela Okinda, said there was need for Government to safeguard the population by overhauling retirement policies instead of implementing minimal changes during Budget review.
She said Kenyans were increasingly being forced to work during their sunset years due to lack of sufficient pension to enable them to maintain their lifestyles.
“With increasing food prices, medical costs and housing, most retirees are finding retirement to be the most difficult part of their lives,” said Ms Okinda.
According to studies conducted by the Retirement Benefits Authority and Alexander Forbes, the larger percentage of retirees living in poverty is in the informal sector which lacks any form of pension plan, in an economy without a social security programme to cater for them.
The workers either lack information on saving for retirement, which they view as another form of taxation, or fear losing their dues.
Ms Okinda, however, said a recent study of the income replacement rates for the members of the Alexander Forbes Retirement Fund indicated a much higher average rate of 53 per cent.
“As fund trustees, we are committed to a long-term objective of ensuring that members are able to retire with at least 60 per cent of their pre-retirement salaries through fund investment strategies such as real estate…to cushion members from the country’s economic volatilities,” she said.
The fund, which now has over Sh23 billion in assets under management, aims to offer varied investment strategies for participating employers to choose from depending on their risk profile.
Retirement funds in Kenya have grown over the years to cross the Sh1 trillion mark.