Experts tip govt on pensions
Nov 20, 2007
THE Government should boost the pensions and retirement funds sectors to ease the shortage of long-term finance, according to industry experts. Prof. Semakula Kiwanuka, investment state minister, said recently that the Government was looking to ease the shortage of long-term financing that is necess
By Charles Bwogi
THE Government should boost the pensions and retirement funds sectors to ease the shortage of long-term finance, according to industry experts. Prof. Semakula Kiwanuka, investment state minister, said recently that the Government was looking to ease the shortage of long-term financing that is necessary to promote long-term lending especially in the property development sector.
“One of the ways will be to offer tax incentives on contributions to private pensions and retirement funds which are key in the mobilisation of long-term savings from the population,†said Mathew Koech, the managing director of UAP Insurance.
Koech said such incentives wound encourage the public to contribute to private retirement funds because they will guarantee better returns.
“Once this money is mobilised, it can then be invested by the investment managers on the securities exchange and in government securities where several companies including mortgage institutions can access them,†Koech said.
The pension and retirement fund sectors are worth over sh1,000b but sector experts say there was potential for more growth since only a portion of the market was covered.
“We are only talking about the portion covered by the National Social Security Fund and some few corporate organisations with retirement fund arrangements,†another sector expert said.
Stanbic Investment manager Martin Owinyi said Kenya constructed social infrastructure like roads using borrowed pension funds after it was scrapped off the donor support list for years.
but managed to continue providing social services for its citizens partly relying on the funds borrowed from pension funds,†he said.
THE Government should boost the pensions and retirement funds sectors to ease the shortage of long-term finance, according to industry experts. Prof. Semakula Kiwanuka, investment state minister, said recently that the Government was looking to ease the shortage of long-term financing that is necessary to promote long-term lending especially in the property development sector.
“One of the ways will be to offer tax incentives on contributions to private pensions and retirement funds which are key in the mobilisation of long-term savings from the population,†said Mathew Koech, the managing director of UAP Insurance.
Koech said such incentives wound encourage the public to contribute to private retirement funds because they will guarantee better returns.
“Once this money is mobilised, it can then be invested by the investment managers on the securities exchange and in government securities where several companies including mortgage institutions can access them,†Koech said.
The pension and retirement fund sectors are worth over sh1,000b but sector experts say there was potential for more growth since only a portion of the market was covered.
“We are only talking about the portion covered by the National Social Security Fund and some few corporate organisations with retirement fund arrangements,†another sector expert said.
Stanbic Investment manager Martin Owinyi said Kenya constructed social infrastructure like roads using borrowed pension funds after it was scrapped off the donor support list for years.
but managed to continue providing social services for its citizens partly relying on the funds borrowed from pension funds,†he said.