This archive report was first published on 11 December 2019.
December 11, 2019 - Zamara, a leading pension fund manager, has taken a significant step in addressing Kenya's low retirement savings rate by introducing an informal pension scheme tailored for domestic workers.
The new scheme aims to cater to the majority of Kenya's working population, who are largely uninsured due to traditional pension schemes locking out informal workers.
According to Zamara Group Chief Executive Officer Sundeep Raichura, millions of Kenyans lack retirement plans, and their children often bear the burden of caring for them in old age.
Off-takers to the scheme will be required to contribute a minimum of Ksh.300 per month, plus an annual subscription of Ksh.100, to cover funeral expenses up to Ksh.25,000.
Employers will also be encouraged to match the employee contribution, a common practice in formal retirement funds, to boost the scheme's funds.
Mr. Raichura noted that the employer's contribution of Ksh.300 is equivalent to the cost of a cappuccino or a bottle of beer.
Zamara aims to enroll up to five million informal-sector subscribers to the fund, taking on the responsibility of pension-based risk aversion.
With over 9.2 million Kenyans expected to retire in the next 20 years, and 90% of them lacking a pension, the new scheme is a crucial step towards addressing the country's retirement savings crisis.
