Kenyans to Save for Retirement Homes in New Govt Plan
The government has unveiled intentions to establish a system enabling Kenyans to save for a retirement residence and medical expenses after they retire.
The National Treasury’s publication of the National Retirement Benefits Policy highlighted the challenges faced by numerous Kenyans in accessing housing and healthcare services upon retirement.
Specifically, the Treasury emphasized that numerous retirement plans lacked provisions for Kenyans to contribute towards the two fundamental entitlements that constitute a significant portion of expenses for individuals aged 65 and above.
“According to the sector plan for population, urbanization, and housing, adequate decent and affordable housing has been identified as a challenge and most Kenyans cannot access decent and affordable housing.
“The population above 65 years continues to grow while the mechanism for the provision of old age care for the elderly is inadequate and has been worsened by the breakdown of the family support system,” read the policy document in part.
As such, the Treasury justified the necessity for the government to revise legislation to provide a structure enabling different retirement schemes to offer savings plans specifically tailored for retirement residences and elderly care.
“The government will promote measures to encourage employers and members to contribute towards Post-Retirement Medical Funds,” read the policy document in part.
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Presently, the majority of Kenyans prepare for retirement by having a portion of their salary deducted monthly. Consequently, upon reaching retirement age, they receive regular monthly payments to cover their essential expenses.
Prominent organizations providing retirement benefits include the National Social Security Fund (NSSF).
It remains uncertain whether the retirement home proposal will be integrated into the Affordable Housing Programme.
However, the government is also intending to develop a structure aimed at barring Kenyans from accessing benefits until they reach a specified age. In Kenya, the retirement age is 65 years.
Similarly, the government is contemplating the potential implementation of retirement savings and benefits for individuals working in the informal sector in Kenya.
“To introduce measures to improve the income replacement rate of members in the retirement benefits sector. The Government will review the legal framework to introduce sub-accounts in retirement benefits schemes besides retirement savings to address the short-term financial needs of scheme members.
“The government will also provide measures to ensure short-term contract employees enroll into retirement benefits arrangements,” read the policy document in part.
Kenyans to Save for Retirement Homes in New Govt Plan
