Enwealth Umbrella Fund has been approved by the Retirement Benefits Authority (RBA) to manage Tier 2 NSSF contributions from employers who opt out of the state pension fund.
Enwealth Financial Services is among the first pensions administrators in the industry to receive the approval, coming weeks after the NSSF Act 2013 took effect.
The act gives employers an option to opt out of Tier 2 NSSF contributions provided they make their members’ remittances into a scheme certified by the RBA for the purposes of receiving these contributions.
Many employers are expected to divert the graduated contributions into private administration funds which offer members higher investment incomes – the private sectors’ returns have averaged in double digits in the past decade – attributed to more efficient processes, higher transparency in investment decisions making, and lower administrative expenses.
Enwealth Financial Services CEO, Mr Simon Wafubwa while making the announcement: “We are excited to receive this approval from the regulator, and look forward to working with employers who would like to channel Tier 2 contributions to our Umbrella Retirement Benefits Scheme to provide them with higher investment income and more transparency needed to manage their members’ savings proficiently. At Enwealth, we have heavily invested in our technological infrastructure to ensure compliance with the NSSF Act and enable us to serve our higher number of clients effectively, send real-time member statements through the online portal, and efficiently process members’ payments”.
The enhanced NSSF contributions, which took effect in February this year, aim to widen pension coverage and adequacy to ensure financial security for Kenyans in their old age.
Tier 2 contributions are pegged at 6% of the employee’s pensionable earnings between the lower and upper earning limits as per the defined deductions schedule. Employers who want to opt out have to make a written request to the Authority at least 60 days before opting to contract out.
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