Zamara goes for domestic workers with new informal pension cover


Zamara goes for domestic workers with new informal pension cover
Zamara Group CEO Sundeep Raichura

In Summary

  • The launch of the scheme aligns to the need for innovation in prompting greater retirement savings in the country of poor savers where more than three quarters of Kenyans are inadequately prepared for retirement.
  • Zamara is seeking to have employers chip in by way of matching up the employee contribution to boost funds to the scheme as is generally the case with formal retirement funds.
  • According to the firm, over 9.2 million Kenyans will fall into the retirement bracket in the next 20 years and 90 percent stand at ageing with no pension.

Pension fund manager Zamara has set its sights on domestic workers in the roll out of its informal-sector tailored pension scheme.

The launch of the scheme aligns to the need for innovation in prompting greater retirement savings in the country of poor savers where more than three quarters of Kenyans are inadequately prepared for retirement.

This as the informal sector which comprise of the majority of Kenya’s working population remains largely uninsured as traditional pension scheme lock-out informal workers.

“There are millions with no retirement plans at all and the only plan is to have their children provide care in old age. Most face a grim reality of poverty and indignity,” said Zamara Group Chief Executive Officer Sundeep Raichura.

Off takers to the scheme will be required to make a minimum contribution in the guidance of Ksh.300 a month plus an addition annual subscription of Ksh.100 to cover last expenses to the tune of Ksh.25,000.

Further to the informal workers contribution, Zamara is seeking to have employers chip in by way of matching up the employee contribution to boost funds to the scheme as is generally the case with formal retirement funds.

“This will significantly increase the pot of savings. Ksh.300 is in any case the cost of a cappuccino or a bottle of beer to the employer,” added Mr. Raichura.

Zamara targets to rope in up to five million informal-sector subscriptions to the fund as the company shoulders the responsibility of pension based risk aversion.

According to the firm, over 9.2 million Kenyans will fall into the retirement bracket in the next 20 years and 90 percent stand at ageing with no pension.

Kenya’s saving rate has remained weak in recent years in spite of the existence of the existence of over 1200 occupational schemes and 30 individual schemes.

Pension scheme administrators are however backing themselves to reach greater heights through the leveraging of digital solutions including mobile-money to grow pension remittances.

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