Firm eyes young workers with pension plan

Financial services firm Liaison Group has launched a low-premium pensions product targeting young workers eyeing home ownership, pension and health insurance.

The four-in-one product dubbed Liaison Mafao, will see contributions starting at Sh50 a day, where users will use their mobile phone to register as contributors as well as track performance of their savings.

Liaison head of pensions Michael Kitau said development of Mafao follows a three-year study where 700 members drawn from various pension schemes they manage offered to participate in a ‘Mafao’ pilot with injection of Sh200 million.

“We got volunteers from the 45 companies where we service pension savings. The conversation was to address pertinent issues that confound Kenyans upon retirement from age-related ailments, challenges of paying rent as well as providing cover for their cars, houses or business and having an investment that provides them with a stipend when in retirement,” he said.

Mr Kitau said their investment’s arm was working on a ready-made housing product that will inform future Mafao-housing needs plug-in thereby enabling Kenyans to plan early in life based on tangible products.

Liaison Group managing director Tom Mulwa said such plans targeting lower income earners will help address the poor savings culture in the country that has seen many people fall into financial problems as soon as they are no longer able to work on a daily basis.

“Only 20 percent of 17.3 million working Kenyans have some form of pension and that leaves about 14 million at risk of financial hardship upon retirement. The solution lies in a major national savings drive that informs all Kenyans on the need to have a pensions savings plan,” he said.

“Higher savings could also help Kenya get cheap funds for development projects as opposed to the current scenario where it has to rely on the costly donor funding.”

The Retirement Benefits Authority, NSSF, Octagon Group and Zamara have in the recent past all launched savings products targeting low income earners and those working in the informal sector.

Currently, Kenyan pension funds have about Sh1.3 trillion in assets under management.