This archive report was first published on 17 July 2019.
On July 17, 2019, the National Treasury made a significant change to the pension regulations in Kenya, effectively barring employees from accessing their employer's pension contributions until retirement.
The move reverses a previous policy that allowed employees to withdraw up to half of their employer's pension contributions before reaching retirement age.
According to the amendments to the Retirement Benefits Regulations 2019, the Treasury has deleted the provision that allowed employees to access 50% of their employer's contributions and the investment income accrued on those contributions.
The change is expected to have a significant impact on employees who lose their jobs before reaching 55 years old, as they will no longer be able to access their pension contributions.
However, the pension industry has welcomed the changes, citing that they are in line with the basic purposes of pension contributions.
Simon Wafubwa, the Managing Director of Enwealth Financial Services, stated that the change in regulations means that employees will no longer be able to access the portion of contributions from their employers that will be deferred until retirement.
Wafubwa also noted that the government stands to benefit from the change in policy, as it will now have a bigger pool of funds to tap into for its domestic borrowing needs.
