Kakamega: Kenyans working in the informal sector, primarily self-employed individuals, now have an opportunity to save for their retirement through the newly established Kenya National Entrepreneurs Savings Trust (KNEST). This government initiative aims to provide a dignified retirement for those who previously had no access to pension schemes.
According to Kenya News Agency, Eunice Oduor, a legal officer speaking on behalf of the CEO of KNEST, emphasized the importance of this initiative while addressing bodaboda riders' leadership in the Western Region. She urged self-employed individuals to register and contribute to the trust, highlighting that previous pension schemes only covered formally employed individuals.
Oduor revealed that a joint research by the government and the World Bank indicated that only 20% of the Kenyan workforce is aware of their post-retirement plans, while over 74% of informal sector workers lack alternative means of survival after ceasing work. She noted that the government acknowledges the economic contributions of informal sector workers, which led to the creation of KNEST to cater to their retirement needs.
The CEO of KNEST, Rose Musonye, explained that the institution will manage the savings of self-employed workers. She highlighted the disparity in retirement planning between formal and informal sector workers, noting that while formal sector workers have structured pension plans, informal workers often lack such arrangements.
Musonye announced that the government will match the savings of self-employed individuals contributing to KNEST, and these contributions will be invested in government securities, which offer guaranteed returns. She stressed that the pension system in Kenya was traditionally designed for formal workers, leaving informal workers without suitable options.
Musonye elaborated on the challenges informal workers face in saving for retirement, given their inconsistent and often minimal earnings. She assured that KNEST is designed to accommodate small and intermittent contributions, with no penalties for non-contributions on any given day.
Targeting over 18 million Kenyans in the informal sector, KNEST promises secure contributions and plans to collaborate with major informal sector associations to extend coverage. Kevin Mubadi, National Executive Chairman of the Bodaboda Safety Association of Kenya, encouraged bodaboda leaders in Western Kenya to mobilize their members to join KNEST and secure a better retirement future.