This archive report was first published on 26 September 2019.
Sanlam Kenya, a listed financial services firm on the Nairobi Securities Exchange (NSE), has announced a voluntary early retirement (VER) scheme to cut costs. The move comes as the company seeks to reduce its expenses, which have increased by 42% over the past four years.
According to Sanlam, the VER scheme will be open to permanent and pensionable staff members over the age of 50 years. Employees who accept the offer will be released from the company at the end of October, with a severance pay equivalent to one month's salary for every three years of service.
Sanlam chief executive Dr. Patrick Tumbo said application for VER will close on October 4. The firm will also offer compensation for unused leave days and a 30% loan rebate on the balance of any outstanding in-house staff loans.
“Exiting employees will receive pension benefits in accordance with organisational Pension Scheme Trust rules and Retirement Benefits Authority (RBA) regulations,” Sanlam said.
The company's costs have grown significantly over the past four years, from Ksh1.4 billion in 2015 to Ksh2 billion in 2018, representing an 8% compounded annual growth rate. Staff costs have also increased, from Ksh746 million in 2017 to Ksh943 million in 2018, a 26% jump.
Sanlam said that the VER scheme is part of its organisational turnaround strategy, which aims to provide more than Ksh200 million in savings through cost containment and revenue growth.
Published on September 26, 2019, the move comes even as the Association of Kenya Insurers recently released a survey that claimed 70% of Kenyans are not prepared for retirement.
