Pension scheme wants debate on senior citizens

Pension scheme administrators want a national conversation on a framework that takes care of senior citizens.

During the Association of Retirement Benefits Schemes (ARBS) AGM, stakeholders said enabling the elderly to lead decent lives could transform the country into an attractive investment destination for old-age related services.

“There are pension and lumpsum payments for senior citizens. Kenya has also introduced a revolutionary post-retirement medical scheme that eases the cost for families. We need to rethink old age and its perils,” ARBS council member Jane Gitau said.

Ms Gitau added that studies should be done on the challenges faced by the elderly while creating avenues for them to continue serving the country.

“The elderly are experienced and could be consultants. But do we understand their needs, strengths and weaknesses that weigh down our economy?” she asked.

ARBS chairman Simon Nyakundi said the association is planning to hold a nationwide survey that would make Kenya understand its old people, their needs as well as generate data that could be used to create insurance products that cater for them.

“Our work is to cater for their well-being. This is a time-bomb since the majority of Kenyans are either informal or contractual workers who have no access to pension savings schemes,” Mr Nyakundi said.

Ms Gitau said the authority is preparing a paper to submit to the government and non-state actors with a view to igniting debate that would look at creating commercially viable products that address old people’s needs.

The government says 840,600 jobs were created last year, out of which 83.6 per cent or 762,000 were in the informal sector where no statutory contributions to pension schemes are made.

“Even the welfare kitty raised is not sustainable since Kenya runs on a shoe-strong budget. The only solution is to force Kenyans to save money during their working life,” Mr Nyakundi said.

He added that ARBS has realised that the Sh2,000 to Sh3,000 stipend given to the elderly cannot enable one live decently, hence the need for a national conversation.

“It is urgent since Kenya’s social fabric is not intact. Young people no longer support their parents,” he said.

Mr Nyakundi said an ARBS pre-needs assessment survey found that most elderly people live in poverty.

“The government set aside Sh9 billion for the welfare of Kenyans aged 70 years and above. What kind of meal can that buy? Can it pay for treatment? The ARBS knows that commercial products that support old-age decency need to be introduced from an informed point,” he said.

Studies by Zamara Group and Enwealth Financial Services found that even Kenyans enjoying a pension can hardly support the lifestyles they had during their working days.

While a 75-80 per cent monthly replacement rate is recommended to enable individuals maintain the same standard of living in retirement, many have no incomes, just extra expenses that make their lives more miserable.