The government has announced plans to introduce a framework that will allow Kenyans to save towards a retirement home and post-retirement medical cover.
In the National Retirement Benefits Policy that was published by the National Treasury, it was detailed that many Kenyans were struggling to access homes and health care services after retiring.
In particular, the Treasury highlighted that many retirement schemes did not provide an avenue for Kenyans to make contributions towards the two basic rights which take up the largest portion of expenditures for Kenyans above 65 years.
"According to the sector plan for population, urbanisation 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.
Therefore, the Treasury explained that it would be prudent for the government to amend laws that will give various retirement schemes a framework to offer savings plans for retirement homes and old age care.
"The government will promote measures to encourage employers and members to contribute towards Post-Retirement Medical Funds," read the policy document in part.
Currently, most Kenyans save for retirement by making monthly salary deductions. In turn, upon retirement, they receive monthly stipends which cater for their basic needs.
Notable institutions which offer retirement benefits include the National Social Security Fund (NSSF).
However, it is not clear whether the retirement home plan will be incorporated into the Affordable Housing Programme.
On the other hand, the government is also planning on working on a framework that will prevent Kenyans from accessing benefits before a set age. The retirement age in Kenya is 65 years.
Equally, the government is also mulling over the possibility of introducing retirement savings and benefits for Kenyans in the informal sector.
"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.
