Kenya is considering introducing mobile-based pension schemes to boost the country’s retirement coverage, the pensions regulator said on Friday.
Nzomo Mutuku, CEO of Retirement Benefits Authority (RBA), told a pension forum in Nairobi that the legal and regulatory framework has already been developed to support digital pensions schemes.
“We are soon going to license mobile-based pension schemes which will leverage on the high mobile penetration rate to enhance savings and retirement coverage rates,” Mutuku told the employer sensitization seminar.
Mutuku said that currently only 20 percent of the labor force has savings for retirement via a pension scheme.
Most of the licensed pensions schemes target those in the formal sector, leaving out the bulk of the population which is in the informal sector, he added.
According to Mutuku, pension schemes based on mobile phones will be a convenient way for the informal sector to join pension schemes.
The digital pensions schemes will allow for use of mobile payment to make monthly contributions toward retirement, he said.
So far, 1,300 pension schemes have been licensed in Kenya, with over 1 trillion shillings (10 billion U.S. dollars) under management, Mutuku said.
Most pension asset investments are in government securities, quoted equities, real estate and offshore assets, he said.