Africa. Why Rotich locked up Sh385bn pension cash for workers below 50 years
The Retirement Benefits Authority (RBA) has come out to defend a legal amendment that will see more than Sh385 billion of workers’ pension savings made inaccessible to those below 50 years.
Treasury Secretary Henry Rotich has, through a legal notice, amended pension rules effectively cutting out workers’ access to their employers’ portion of savings before clocking the official retirement age of 50.
“Regulation 19 of the Principal Regulations is amended in paragraph (5) by deleting the words “and fifty percent of his employer’s contribution and the investment income that has accrued in respect of those contributions” appearing in sub-paragraph (a) (ii),” reads the legal notice by Mr Rotich.
Kenya’s total pension industry assets were valued at Sh1.14 trillion as at December, out of which Sh384.6 billion was employers’ contribution. In a statement, the RBA said the amendment, which is a reversal of yet another change in law made about eight years ago, is intended to protect workers from old age poverty.
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