Kenya Orient Assurance has obtained the nod of the Retirement Benefits Authority (RBA) to handle second-tier NSSF contributions for employers opting out of the State pension fund.
The insurer is expected to manage the money via two schemes that include Kenya Orient Individual Pension Plan and Umbrella Pension Scheme.
“This milestone marks a significant step towards our continued commitment to providing comprehensive retirement solutions with great returns to our clients,” said Kenya Orient’s principal officer Jackson Muli.
“We are happy to be joining other industry players in helping eligible employers with the opt-out process for tier II contributions. This regulatory approval further solidifies our position as a reliable pension provider.”
The approval comes following the amendment of the NSSF Act 45 of 2013 which now caps tier-one contributions from both the employee and the employer at Sh720, amounts which are sent to NSSF, while contributions above Sh720 up to a maximum of Sh1,440 are categorised as tier-two and are being managed by authorised private schemes.
Employers are allowed to pay their tier-two contributions to a registered retirement benefits scheme which has been approved by the RBA to receive the contributions in an arrangement referred to as contracting out.
Qualifying private pension schemes are issued with a reference scheme certificate by the RBA, which proves the scheme’s compliance with the regulator’s guidelines.
Last month, RBA cleared 84 private pension schemes to handle the tier-two contributions, among them CIC Life Assurance, Octagon Africa, Enwealth Financial Services, Britam, CPF Financial Services, Zimele and Old Mutual.
Estimates seen earlier by the Business Daily placed expected netting from tier II contributions at Sh12.43 billion in the financial year to June 2024 and at a higher Sh23.82 billion by June 2027 when the 2013 NSSF Act is fully implemented.