Employees from all sectors have been asked to save for their retirement as the country continues to cripple with hard economic times.
Recent data has revealed a significant shift in how Kenyans are preparing for their retirement, with an increasing number now relying on the National Social Security Fund (NSSF) to secure their future.
Since the government began implementing the NSSF Act of 2013, the public pension fund has seen steady growth, while traditional occupational retirement schemes have stagnated.
According to the 2024 Central Bank’s Finances Household Survey, the percentage of Kenyans saving for retirement through NSSF rose to 11.4 per cent in 2024, up from 9.5 per cent in 2021.
Speaking in Bungoma over the weekend after meeting the business class and employees, Jane Kimani, a business development manager at Britam Insurance reveals that research shows that many retirees die poorly due to bad saving habits.
“In Bungoma, we have seen a positive response on those retiring save for their retirement, I urge all in service to opt saving for their retirement life,” she noted.
Kimani says that their role is to help individuals currently in the workforce prepare for their retirement.
She notes that many people only realize the need for financial stability when they approach retirement, which has become a growing concern in the country.
Further, Kimani stated that Britam has reached an agreement with employers to prioritize educating their employees on retirement planning. Specifically, urging them to contract out their National Social Security Fund (NSSF) Tier 2 contributions to Insurance, to ensure employees get an honorable retirement.
Contracting out falls under retirement planning, the National Social Security Fund (NSSF) Act allows employers the option of paying out their Tier 2 contributions to a private pension scheme through a contracting out process where they have to consider whether to contract out or pay to NSSF.
She points out that if one has to contract out, they apply for approval by the retirement benefit authority, this is done via a simplified form, form C1 adding that once approved to contract out, they shall then apply to have their Tier 2 contributions already remitted to NSSF to be paid back to the scheme.
“As Britam, we are confident that every employer in Bungoma will have a proper retirement plan in place,” Kimani said
Ambrose Wesonga, the manager of Britam’s Bungoma branch, urged residents to consider contracting out their pensions to Britam as it offers greater benefits in their retirement.
He pointed out that Britam has been declaring competitive returns in the markets with a minimum guaranteed return rate of 5%.
Tier 2 contributions are based on 6% of an employee’s pensionable earnings currently capped at Ksh 72,000 per month for the year 2025.
The maximum Tier 2 contributions are there for Ksh 3,840 per month being calculated as 6% of Sh. 64,000 that is Upper Earnings Limit (U.E.L) of Sh 72,000 minus Lower Earnings Limit (L.E.L) of Sh 8,000 for both employer and employee
Anne Wafula, a professional in business development, stated that the workshop aimed to ensure individuals understand where their retirement funds will come from, preventing financial struggles after retirement.
“In Kenya, many people retire poorly. They receive a lump sum of Ksh 200,000 and end up spending it within a week,” she said
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