Syovata Ndambuki

On 20th, March, 2024, the National Treasury published the National Retirement Benefits Policy. The policy – which was approved by the Cabinet in November, 2023 is a framework aimed at enhancing retirement benefits. Treasury’s move to publish the document is perceived as a green light.

The framework identified some of the challenges facing the retirement benefits sector – among them – low compliance levels among self employed and informal sector workers.

“Although the NSSF scheme is mandatory, most of the employers in the informal sector and self employed workers have neither registered nor contribute to the scheme,” reads a part of the policy.

The policy further recommends a Post-retirement Housing Fund, noting that since independence, access to affordable and decent housing has been part of successive government agendas. This agenda is yet to be fulfilled given that only 59.5% of Kenyan households live in their houses according to the Kenya Integrated Household Survey Budget of 2018.

In addition, the policy notes that housing takes up a big chunk or retiree’s budgets. It is common for retirees to use their pension payments to build retirement homes.

“The various pensioners’ surveys conducted by the Retirement Benefits Authority over the years have revealed that housing features among the top three expenditure items for retirees,” reads the policy.

To help retirees retire decently, the policy recommends the above mentioned post-retirement housing fund, which will help them raise funds for a retirement home – while still in the workforce.

It is not clear how this fund will be implemented or whether it will take the same format as the NSSF scheme – but the policy recommends several steps to enhance and expand retirement benefits sector.

Besides retirement housing, the framework also recommends improvements in post retirement medical benefits and old-age care.

“The population above 65 years continues to grow while the mechanisms for provision of old age care for the elderly is inadequate and has been worsened by the breakdown of family support systems”.