Kenya

Kenya's Minister of Finance announced a change in the withdrawal rules for the voluntary occupational pension plans. According the new rules, workers who leave their jobs before they reach normal retirement age (60 years for both men and women) may withdraw their own contributions together with accumulated interest, as well as 50% of employer contributions, provided that they contributed to the occupational pension plan for at least 3 years. The remaining funds must remain in the account until the worker reaches the retirement age. The new regulation reverses a law passed in 2005 that restricted early withdrawals to worker's own contributions.

The change was introduced due to great concern that many workers would not live long enough so as to receive their retirement funds. Indeed, according to estimates by the World Health Organization, in Kenya life expectancies at birth are 53 years for men and 55 years for women, and are thus significantly lower than the retirement age of 60.

As of 2007, there are approximately 1,357 occupation pension plans in Kenya, with total assets under management currently estimated at 200 million shillings (approximately US$2.5 million). The voluntary occupational pension plans supplement a provident fund program administered by the National Social Security Fund.

 

Sources: "Country Profile: Kenya," International Organisation of Pension Supervisors, 2007; Complementary and Private Pensions Throughout the World, 2008; "World Health Statistics 2010," World Health Organization, 2010; "Early Retirees to Access Their Pension Cash," All Africa, November 1, 2010; "Early Retirees Get Access to Pension Cash Amid Fund Managers' Concerns," Daily Nation, November 1, 2010.
 
Article with courtesy of Social Security Online
 
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