Over the last two decades, pension assets have grown substantially under the Retirement Benefits Authority (RBA).

The regulator has developed and amended pension schemes’ regulations aimed at strengthening the legal and regulatory framework in the sector.

The goal has been to achieve comprehensive pension coverage across the formal and informal sectors and better protect the interests of beneficiaries and the rights of pension contributors.

As such, pension coverage has grown to about 22 percent of the labour force from 12 percent in the year 2000, with the industry coming second as the most preferred mode of saving.

While acknowledging growth and development in the sector, more still needs to be done to increase coverage in Kenya given that only about 3.5 million people out of the 27.1 million people in the workforce are in pension schemes.

The bigger question is how this gap can be filled. The emerging factor that has been an influence of change over the last two decades has been consumer needs.

The ever-changing consumer needs have catapulted changes such as the access rules to allow members before retirement to get up to a maximum of 50 percent of the total accrued pension benefits and the introduction of new asset classes.

The needs the pension sector is expected to meet continue to expand enormously, particularly, in the volatile markets.

However, I believe there are other factors that are already gradually influencing change and ones that pension sector players can factor in as we seek to grow coverage.

The latest wave of adults, Millennials and Gen-Z especially are the first generation with little or no experience of a pre-internet world, and the first to have been steeped in online media virtually all their lives.

However, compared to other generations, they face a series of difficulties in building wealth, due to the combined impact of rising cost of living, unemployment and higher rates of debt.

These factors constrain their ability to save for retirement during their core earning years. However, their online mindset helps them a lot by staying informed and this is a factor pension players can take advantage of.

Through the use of digital channels, we have the advantage of proactively communicating and engaging with this generation to better educate them on the need to save for retirement and in the same breath, listen to their needs and see how to address them.

Covid-19 threatened to reverse gains made over the past two decades. Global stock markets plunged significantly meaning that many pension pots shrunk and for many, their disposable income was reduced due to loss of jobs and salary cuts.

As a result, more than three percent of contributors either reduced or suspended their contributions. Given the uncertainty of pandemics and experience, one key lesson was that pensions can provide a cushion in crises.

The high levels of inflation, rising interest rates, and greater economic uncertainty are adding more financial pressure to the existing pension system and it is critical that we adjust pension offerings to meet the needs and expectations of our future communities.

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