Pension Fund Trustees and administrators have been urged to show greater accountability to members by ensuring they have access to the right messages.
Speaking at the official opening of the three-day Pension Trustee Seminar organized by Zamara, Sundeep Raichura, CEO, Zamara Group pointed out that adequate member communication were the greatest failures within the pension schemes.
“Many trustees of pension funds presume that the two key points when communication is relevant is on joining and on leaving. In reality, individuals need information and counselling throughout their journey as pension fund members.” Mr. Raichura noted that to effectively address the savings and retirement issues of Kenyans there was need to focus on the entire financial journey and the holistic need of individuals while they make that journey.”
Raichura gave individuals regular information about their pension savings and whether they were on course for an adequate benefit on retirement or exit would ensure members of pension funds were more connected with their retirement saving.
Raichura also urged the Government to seriously reconsider the current tax deductible limit on pension contributions of only K Shs 20,000 a month and have this substantially increased given that it had not been increased for almost 20 years.
“If we are serious about increasing long term saving in our country, the Government does need to provide the right incentives for such savings. Currently the tax system is stacked against pensions savings and individuals hence choose other investments such as unit trusts to pension savings” added Raichura.
Raichura further added that the pensions sector played a valuable role in the country’s economy holding more than 30% of Government debt and significant holdings in the NSE.
He implored trustees to consider the alternative investment space, including investing in private equity and infrastructure as a means of diversifying their assets and getting better returns.