Pension savings hold key to home ownership
Tuesday, May 19, 2020 0:01
By HOSEA AKILI |
Kenya’s pension and retirement benefits industry plays a big role in the economy.
The clause, which proposes to allow contributors to access 40 percent of their savings ahead of retirement will free tens of billions of shillings for home ownership given that Kenya’s pension sector currently controls Sh1.2 trillion in value; held in property, cash, shares and government bonds among other investment instruments.
With the new law in place, workers will have an incentive to save in retirement benefits schemes as well as boost one of the Government’s Big Four Agenda, which aims to improve home ownership rates by enhancing the diversification of sources of funds to be used in the purchasing of residential homes by Kenyans.
When it comes to leveraging retirement savings to guarantee home ownership, Kenya can benefit immensely by modelling after the Asian tiger – Singapore.
This is similar to the defined contribution arrangement provided by the County Pension Fund – which is the retirement scheme for county governments in Kenya.
