UPDATE ON FINANCIAL EDUCATION CAMPAIGNS
A PRESENTATION BY
EDWARD ODUNDO
CHIEF EXECUTIVE OFFICER
MENA WORKSHOP ON PRIVATE PENSION REGULATION AND SUPERVISION
AGENDA
Location of Kenya
Kenya’s Retirement Benefits Structure & Membership
Current status of Pensions Coverage and Replacement Rate
Attitude and Perception towards Retirement
Pension Education Campaigns
Challenges
Way Forward
2
Location:
Kenya’s Retirement Benefits Structure & Membership
National Social Security Fund (NSSF)-67%
The Civil Service Pension Scheme – 22% Provident Fund
Non contributory & Unfunded
Contributory & funded (both employee
Covers all service employees
and employer)
Exempted from Retirement Benefits
Accounts for 28% of total industry assets
Authority Supervision
Covers all employer with 1+ employees
Legislated by Act of Parliament
Regulated & Supervised by RBA
Private Occupational Schemes – 11%
contributory & funded
Accounts for 70% of Industry Assets
Covers employees of the employer
Regulated & Supervised by RBA
Legally formed under trust deed
1282 schemes (Estimated membership
– 400,000)
Individual Retirement Benefits Schemes-0%
Contributory & funded
Open to all - formal & informal workers
Regulated & Supervised by Retirement
Benefits Authority
Legally formed under trust deed
20 Individual Retirement Benefits
 Schemes Estimated membership15000
Current status of Pensions Coverage and Replacement Rate
Pension saving is a voluntary exercise and not mandatory
No universal pension – Pilot cash transfer programme
targeting senior citizens (over 65 years) introduced in 2009
Only 15 % of the workforce is covered (mostly in the formal
sector)
Plans underway to reach the more than 80 % that was not
covered (informal sector )
Low replacement rates (at 20%) – people not saving enough
to increase income replacement ratios at retirement
Attitude and Perception towards Retirement
The concept of retirement (to many) does not involve pension schemes–
(mainly associated with savings for assets - house, land, cows etc)
Perception problem:
Suspicion that scheme providers may collapse with members
savings or may just refuse to allow them access to the savings
Employer’s responsibility to drive the pension agenda
Retirement is too far away so why worry about it now?
Culture:
Traditionally children take care of Parents/elderly
Stigma associated with retirement – feared, even dreaded. Considered
untrendy – avoided by the young. Society not retirement friendly
Pension Education Campaigns
RBA has adopted a Multi-faceted approach to pension education
Some of the Education Platforms leveraged include:
Public Education campaign
Trustee Training
Retirement Planning Seminars
Open Day
Media Education
Road Shows
Trade Fairs
Financial Education School curriculum
– In progress
7
Public Education Campaign:
Public Education Campaign is one of the key activities undertaken by the
Authority. Three campaigns have been carried out in the past.
These campaigns were aimed at:
Demystifying the Pension subject
Educating the public on the Role of RBA
Arousing curiosity about pensions by sensitizing the public on pension
matters to change perceptions and influence behavior
Inculcating a saving culture in Kenyans by starting them early on the path to
saving for retirement.
Encourage employers to offer retirement savings programs for their
employees.
RBA is developing a “Call to Action” campaign that will cause Kenyans to sign
up for pension plans. This campaign will be developed in partnership with
media houses to influence local TV content
Public Education Campaign “The Questions Campaign” April
2009 – June 2010
Trustee Training Seminars
RBA runs a Trustee training programme targeting individual trustees at no cost to schemes to
improve scheme administration and enhance the sector’s growth through improved
governance.
One day curriculum covers the following topics:
 The general role & Responsibilities of Trustees
 Compliance requirements
 The role of Trustees in Investment of retirement Benefit Scheme assets
 Taxation
 National Insurance Hospital Fund products
 Groups exercises
Majority of participants are1st-time participants
To date, all the 1300 registered schemes have at least one trained Trustee
Trustee training available to all schemes irrespective of compliance status
Development of a Trustee Training Certification Programme in collaboration with
College of Insurance, Humber Center for Employee Benefits, Canada and Association of
Retirement Benefits Schemes (ARBS) is in progress to be launched in June 2011
Retirement Planning Seminars

Previously Pre-retirement seminars targeted scheme members 50 years and above.
The seminars have since been renamed “Retirement Planning seminars” with no age
limit

Objective:


To equip members with investment and social skills to help them cope with life in
retirement
Key Topics:

Testimony from a retiree

Benefits

Time Management

Attitudes to retirement

Investment & Personal Financial Management

Health Issues in retirement
Challenges
Increasing coverage in an environment where Retirement Saving is
voluntary
Revocation of the Preservation Rule has unlocked the Employers portion
of benefits allowing members to withdraw 75% of their benefits before
attaining retirement age
Competition from other saving options offering more attractive products
i.e. Cooperative Societies, Bank Savings Accounts, Property, Equity,
Investment Groups, etc
Changing the orientation of Kenyans from a spending culture to a saving
culture
Way Forward
Intensify efforts to increase awareness levels on the need to save for retirement
using:
Mass Media
Vernacular FM Radio stations with regional captive audience
TV Programming to influence content
Print Media – through a pension column
Demonstrate value for saving through a Pension plan using clear illustrations
that show benefits that will be derived from long-term saving using a pension
calculator
Partner with Ministry of Education to introduce financial literacy curriculum in
schools to inculcate a saving culture in children at an early age to change attitude
and shift orientation from that of a spending culture to a saving culture
Build Media partnerships to enlist their support to amplify messages on pension
issues with a view of reaching targeted segments across the various platforms
Continue to lobby Government to make pension saving compulsory
Thank You
Asante
Thank you
Edward Odundo, MBS
Chief Executive Officer
Retirement Benefits Authority
P.O. Box 57733, Nairobi, Kenya
Web: www.rba.go.ke
14