The government is undertaking further reforms to expand and improve the management of pension schemes.
National Treasury CS Ukur Yatani revealed that a national retirement policy that will harmonise pension-related laws and enhance accountability is in the pipeline and will be ready by the end of this year.
While unveiling Kenya’s 2021/2022 Ksh3.03 trillion budget in Parliament, Yatani said the policy seeks to achieve comprehensive pension coverage across the formal and informal sector so as to protect the interests of beneficiaries and rights of pension contributors.
“Mr. Speaker, given the disparities in the design of the various existing pension schemes and the attendant laws, it has become necessary that these laws be harmonised, hence the need for establishment of one National Retirement Policy…. In this regard, Mr. Speaker, I shall be publishing this policy by December 2021” he said.
On delay of pension payments, the CS explained that the National Treasury had rolled out targeted reforms increasing processing and payment of pension benefits by 40 pc.
“In the past, the processing and payment of pension benefits to retired public servants has neither been efficient nor timely, thus denying senior citizens regular incomes. To address this, National Treasury has carried out targeted reforms including systems re-engineering and the provision of real-time pension services in all the Huduma Centres countrywide” he said.
“We expect further improvement with the planned implementation of Pensions Management Information System later in the year” he added.
The Retirement Benefits Act will also be amended to provide for the registration and regulation of corporate trustees that provide services to pension schemes for good governance and improve accountability and transparency in the management of the schemes.
The CS said the ministry had developed post-retirement medical regulations to allow members to make additional voluntary contributions to a medical fund.
He said the funds will be regulated to protect members from exploitation.
“….the Stand Alone Post-Retirement Medical Fund has remained unregulated thus adversely exposing members’ funds. As such, I propose to amend the Retirement Benefits Act to provide for regulation of these funds”
The mortgage regulations will be amended to allow members to utilize up to 40 percent or maximum of Ksh 7.0 million of their accrued benefits to purchase a house under a tenant purchase basis by their pension scheme.
The informal Sector Pension Scheme targeting more than 15 million informal sector workers will be rolled out next year.
“To this effect, I wish to report that necessary instruments to operationalize the scheme including, the Trust Deed & Rules, Business plan, and Investment Policy have been prepared. We intend to roll out this scheme in the next financial year” he said.