Economic disruptions brought about by the Covid-19 pandemic have now affected Kenyan workers’ pension schemes. This is after employers suspended contribution to their pension scheme running into nearly Ksh 2 billion between April and September.
The Retirement Benefits Authority (RBA) allowed employers to suspend, modify or terminate their pension contributions following the outbreak of the virus in mid-March.
For employees of the companies and organisations that took advantage of the regulatory break to reduce their pension burden, the process of accumulating a nest egg has been slowed down.
“We had 44 occupational schemes that suspended employers’ contributions,” RBA’s chief executive, Nzomo Mutuku, said, “For the occupational schemes, the quantum involved was Sh1.94 billion. Some were suspending (contributions) for three, six, and nine months.”
In April, just a month after Kenya recorded its first coronavirus case, the retirements regulator allowed employers in hardest-hit sectors such as travel and hospitality to notify it of measures taken to contain costs, including suspension, reduction of contribution rates or stoppage.
The RBA boss further said that most of the defaults were seen in sectors of the economy that suffered the most from the pandemic such as tourism and education.
The economy has taken a major hit from the panic induced by the pandemic besides restrictions taken to control it.
The government imposed a series of measures, including closure of schools, bars, ban of international travel and lockdown of Nairobi, Mombasa, Kilifi, Kwale and Mandera counties.
The restrictions have been gradually lifted since August but their impact is expected to linger on even as rising cases of coronavirus raise the spectre of new controls
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