Terminated employees can no longer withdraw their employer’s contributions or investment income on those contributions before they reach retirement age, under recent changes to Kenya’s pension rules. The measures aim to increase individuals’ financial security in retirement and feature in Legal Notice 88, effective 17 Jun 2019, that amends the Retirement Benefits (Occupational Retirement Benefits Schemes) Regulations 2000.
Previously, employees who hadn’t reached retirement age were able to withdraw up to 50% of their employer’s contributions and the resulting investment income after terminating employment. Employees are still allowed to withdraw their own contributions.
Employers should ensure that trust deeds and rules governing their provident and pension funds align with the change.