Businesses & Financial News

Zamara Group to unveil new pension plan

By Eunice Wawuda

Financial services provider, Zamara Group will tomorrow unveil its innovative pension plan in the Kenyan market. The Whatsapp-based plan is expected to make pension solutions much easier, simpler, and convenient.

This comes amid calls by certain pension providers who are calling on stakeholders in the pension market to switch to sustainable pension plans or ‘green’ retirement benefit products amid concerns that the effects of climate change could hit retirees hardest.

At the just concluded seventh 2021 Devolution Conference, it emerged that uncertainty over the path of global warming posed profound risks for the country’s pension plans and many providers today are struggling to steer the transition to a lower –carbon future.

“As frontrunners in Kenya’s social security sector, we are taking comprehensive steps to mitigate our exposure to ESG risks as we pursue opportunities associated with sustainable investing,” said Hosea Kili, the Chief executive of CPF and Lap trust pension schemes in his presentation at the conference.

As a result, Kili now wants the Retirement Benefits Authority (RBA) to work with industry stakeholders to develop a measurement framework for climate and other ESG-related risks in an effort to promote incentives to allow pension funds establish robust internal expertise on climate and other ESG-related considerations.

Greening a pension system ordinarily involves developing awareness and expertise within the pension funds regarding climate change, including drivers of vulnerability and exposure by sector and ESG considerations, such as critical metrics and regulatory guidelines by RBA.

The regulator has also been advised to consider expanding social security coverage by making pension contributions mandatory for all Kenyans.

In his presentation, CPF’s Kili says an establishment of a universal fund would be ideal in allocating a percentage of the national budget to go towards the fund for universal pension and medical coverage.

“This can be achieved by introducing a pension levy on mandatory goods and services to realize mandatory State social security. It could also look at a levy on vital goods such as airtime, a small portion of which can be built over time,” added Kili.

The proposed universal fund, he said should be implemented as a flagship project under Vision 2030 while benchmarking on Norway, which used proceeds from its oil resources to build a sovereign fund, which it invests in major projects such as infrastructure, affordable housing.

This follows a previous plea to pension scheme trustees in Kenya by the Capital Markets Authority (CMA) to diversify their investments in a bid to revitalize the sector that has been impacted negatively by the Covid-19 pandemic.

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