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By Dianah Wanyonyi
Mombasa, Kenya: Kenya’s stakeholders in the pension and retirement sector are worried about the low numbers of Kenyans who have joined and are remitting their retirement savings. Statistics indicate that only 20% of Kenyans have retirement schemes.
James Olubayi, Zamara Group Executive Director, highlighted a significant statistic at the Zamara 2025 Pension Convention in Mombasa dubbed “Disrupting for Impact: Transform, Integrate and Sustain.”
Olubayi noted that only an estimated 17% of the workforce in sub-Saharan Africa participates in any type of retirement or pension scheme.
“However, nearly 80% of our people work in the informal sector with very little or no retirement protection. This is not merely a policy gap, but it is a human dignity gap. Here at home in Kenya, it’s estimated that about 26% of the workforce is saving within the formal pension system,” he said.
Adding “That is not a statistic that we can be proud of after having practiced pension for many years. We must disrupt and reimagine how we can bring retirement security to millions of Kenyans that we have left behind.”
According to Olubayi, Zamara has developed an innovative product and Information Technology (IT) that will help in covering the informal sector.
“At Zamara, we are ready to play our part. We have developed an innovative product and IT systems designed to support great and exponential growth in coverage, particularly in the informal sector. Our mission is to ensure that the story of the people of Kenya begins to tell the different and better story, one of inclusion, dignity, and shared prosperity.”
Kimani Kuria, who is the Molo Member of Parliament (MP) and the Chairperson of the Departmental Committee on Finance and National Planning in the National Assembly, agreed with Olubayi’s sentiments, saying that the informal sector remains excluded from retirement savings because it’s not mandatory for them to contribute from their salary or pay.
“Our pension schemes, how they were structured, focus so much on employer-employee contribution, so it’s mandatory for the contribution to be channeled to the retirement scheme,e and this means that the employer also contributed, but in the informal sector, there is no that contribution, unlike the formal sector, where an individual pays or remits the contribution. And there are not enough incentives to encourage the informal sector to join in retirement schemes,” said Kuria.
On policy, Kuria said that the government has introduced new tax incentives to encourage saving for retirement for Kenyans.
“The Public Finance Management Act of 2024 and the Finance Act of 2025 have prioritized pending bills as first charge not only as law but most importantly, to make it a criminal offence for the accounting officer, which means that if the accounting officer in the government institutions has not remitted retirement monies of your employees, you will be held liable. This move will make sure that all the officers are accountable.”
Jackson Nguthu, the Director, Supervision Directorate at the Retirement Benefits Authority (RBA), noted with concern that the major challenge they are facing is employers not remitting their employees’ contributions to schemes.
“Since September, we have Kshs. 65 billion that has not been remitted, and this is coming from county governments, universities, sugar companies, among others. We have to ensure that those monies are remitted to the pension scheme,” said Nguthu.
Urging “We have presented a bill to the parliament that will enable Kenya Revenue Authority- KRA, to null the accounts that have not been remitted and also we also want the employer who has not remitted the funds to be held accountable and like a personal liability.”
This crucial bill in Parliament aimed at strengthening the Kenya Revenue Authority’s (KRA) ability to enforce tax compliance. This legislative initiative seeks to address the persistent issue of unremitted funds and to enhance accountability within the tax system.
The bill is set to introduce a significant change in how employers who fail to remit funds will be treated. Under the new legislation, such employers will be held personally accountable, facing personal liability for the unremitted amounts. This provision marks a departure from previous frameworks, which may have placed primary responsibility on the corporate entity rather than the individual employer.
This proposed change aims to reinforce employer accountability and prevent the misuse of funds. The government intends to close existing loopholes that have allowed some to avoid responsibility for tax evasion or negligence in remitting funds.
