The Retirement Benefits Authority (RBA) has withdrawn its proposal to bar workers from accessing their pension savings before the age of 50, following stiff opposition from younger employees.
Instead, the RBA now seeks to allow workers to access up to forty percent of their retirement savings before turning 50, through changes expected in the July Finance Bill.
Currently, employees under 50 can access half their savings when they change jobs—a practice the RBA warns is depleting retirement funds and leaving many with inadequate savings at old age.
RBA Director of Research, Strategy, and Planning Lazarus Keizi noted that while older workers supported stricter limits during public participation, younger workers rejected the move, citing pressing financial needs like housing.
“First of all, during public participation, the mature people were for the preservation. It is only the young who were against the proposal,” Keizi said.
“After discussions, the consensus was on a gradual implementation beginning with the requirement to preserve 60 percent of the member pension contributions.”
Keizi added that future revisions to access limits would require fresh public participation under the Statutory Instruments Act.
RBA CEO Charles Machira said the regulator still supports early access for critical needs such as school fees, medical expenses, and mortgages.
“We are allowing people to access forty percent of their contributions if this proposal goes through,” said Machira.
“We are also deliberate that we should create avenues that if you need school fees, medical, or a mortgage payment, then we must find ways to ensure people can access their money.”
The debate comes amid rising old-age poverty, with data showing that 81.5 percent of Kenyans aged over 60 remain in active employment. Analysts attribute this to low pension coverage and inadequate payouts, forcing retirees to keep working.
More than 70 percent of Kenyans retire without a pension, relying on the meagre National Social Security Fund (NSSF) payouts. Monthly contributions to NSSF were raised to Ksh.4,320 in February 2023, boosting the fund’s assets from Ksh.295.6 billion to over Ksh.400 billion by June 2023.
A 2024 RBA survey revealed that 57 percent of retirees found their savings inadequate, while 41 percent said they were sufficient. Only two percent were uncertain.
To address the deepening poverty among the elderly, the government has rolled out a monthly stipend of Ksh.2,000 for citizens aged 70 and above.
Kenya’s aging population, longer life expectancy, and weakening social support systems due to urbanisation are putting more pressure on pension policies.
