Citizens can pay and save while they are working and benefit from medical coverage in retirement.
Britam has launched Britam Afya Pension Plan that enables customers to purchase medical insurance.
Medical care represents the largest component of retiree’s spending and many Kenyans have difficulty paying for treatment when they retire.
Many retirees must pay for medical care out of pocket, reducing their retirement benefits.
“It was important to create a product to assist senior citizens start planning g now for retirement medical expenses,” Britam’s group MD Tavaziva Madzinga said on Friday.
During employment, most employees enjoy medical insurance provided by their employer, he said. On retirement, this benefit ceases so they cater for their own healthcare.
“This eats into hard-earned savings,” Madzinga said.
Britam’s Afya Pension lets working people save for future medical care when they retire.
The 2019 Pensioners Survey by the Retirement Benefits Authority indicates 77 per cent of pensioners had medical cover mainly from NHIF.
Those with working spouses use their spouses’ cover, while others’ bills were paid by their pension scheme.
Of those with medical insurance cover, 92 per cent indicated they pay for insurance using their own finances. A significant number are helped by their children.
Many pensioners have no medical cover and pay out of pocket.
Nzomo Mutuku, chief executive of RBA, said the new scheme will improve health access for many Kenyans.
He said Britam Afya Pension aims to close the gap for universal healthcare, particularly for senior citizens.
The plan aims to ensure the decency of life in retirement.
Studies consistently indicate healthcare is the biggest expense in retirement, prompting policy action to reduce the problem.
“As a regulator, we pride ourselves on having instituted a legal framework to implement Post-Retirement Medical Funds (PRMFs),” he said.
The fund offers benefits, including transfer funds at will if employment changes, tax efficiencies and superior investment returns.
On retirement, the plan member can choose the type of medical cover to purchase
One can transfer part or the entire fund to a registered insurance company to purchase medical insurance, or use medical benefits within the plan.
The administration of the medical fund shall be segregated from the funds of the main retirement benefits scheme. Pension scheme trustees shall prepare a separate investment policy for the fund.
(Edited by V. Graham)