MBAO pension plan which was launched in June 2011 targeting workers in the informal sector now collects a minimum of Sh 4 million monthly, a trustee has revealed.
The scheme is a voluntary retirement savings plan with a minimum daily contribution of Sh20 remitted via Safaricom's mobile transfer service M-Pesa or Airtel money service.
According to one of the founders and a trustee of the scheme Elizabeth Ngigi, the informal sector pension saving plan now stands at a value of over Sh35 million and has 40,000 members.
"It has done so well that even South Africa now wants to have their own version of Mbao pension scheme," said Retirement Benefits Authority CEO Edward Odundo.
At its launch last year, the scheme had 11,000 members recruited in its pilot phase. RBA and trustees of Mbao said they are in talks with their counterparts in South Africa to help them set up their own pension fund for the informal workers.
With the success of the pension scheme, Odundo said that members can now use60 per cent of their savings to as down payment for mortgage payments.
Meanwhile the Central Organization of Trade Unions has differed with RBA for faulting the proposed NSSF Bill which seeks to transform the fund from provident to pension status.
Under the proposed law, NSSF wants to increase benefits to members through such services as maternity grants and job loss grants among others.
Odundo on Friday said that some of the provisions under the bill will not be financially sustainable and that NSSF should not be given the power to approve which private scheme can opt out and which one can not. Odundo noted that such a function should be left to RBA as its the industry regulator.
COTU on its part said RBA was adequetely represented at the consultative meetings held to discuss and formulate the Bill and that its views and proposals were "adequately incorporated."
In a statement released yesterdaay COTU boss Francis Atwoli, said the proposed law was in line with the International Labour Organisation's requirement for a first pillar social security pension scheme.