Nairobi — The National Treasury is considering the incorporation of an exempt pension structure aimed at making the pension sector more attractive, following a nod from the cabinet for the implementation of the Retirement Benefits Policy.
Speaking during the unveiling of the Retirement Benefits Authority (RBA) strategic plan for 2024-2029 and the launch of the Retirement Benefits Policy, Albert Mwenda, Treasury Director General for Budget, Fiscal, and Economic Affairs, emphasised that the move seeks to increase the uptake of retirement savings, which currently stands at a modest 26 percent.
"The policy will provide a framework for the growth of the retirement benefit sector, guaranteeing a sustainable retirement benefit system for our country," he said.
As part of the new proposals, the Treasury has suggested increasing the tax-deductible amount from the current Sh20,000 to Sh30,000.
Additionally, a Sh1,000 monthly tax-deductible amount on post-retirement medical funds has been proposed.
Mwenda further disclosed that retirement schemes currently hold a total of Sh1.9 billion, a figure that the Treasury aims to increase to Sh3.2 billion over the next five years.
"There is still much ground to cover to achieve universal pension coverage. This is partly due to the fragmented and uncoordinated legislative and policy framework," he said.
Treasury Principal Secretary Chris Kiptoo, on his part, commended the initiative, stating that it will secure the future of retirees.
He asserted that the policy would enhance consumer protection mechanisms, ensuring greater transparency within the retirement benefits sector.
"The policy will provide a framework for the growth of the retirement benefit sector thus guaranteeing a sustainable retirement benefit system for our country," he said.
To oversee the implementation of the strategy, the Treasury has established a Policy Implementation Taskforce, chaired by the National Treasury and RBA, which will engage stakeholders to develop an effective implementation strategy.
The new proposals mark a reintroduction of some of the recommendations contained in the defunct 2024 Finance Bill, underscoring the government's commitment to fortifying the country's pension system.
