Zamara now bars early retirees from employer cash

Zamara Fanaka Fund board of trustee chair Lucy Kambuni. PHOTO | DIANA NGILA  

By JAMES KARIUKI
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Zamara Fanaka Retirement Fund has upgraded its systems to bar early retirees from accessing employer contribution until they attain retirement age.

Board of Trustees chairperson Lucy Kambuni said this was a good measure that reserves more money for use during sunset years.

The move is in line with the new Preservation Rules meant to ensure that workers don’t retire to abject poverty. The practice has been that workers retiring early access their entire pension savings, leaving them with nothing for their twilight years.

“It is painful but in the best interest of our hard-working employees who need more money to lead decent lives upon retirement,” said Ms Kambuni.

She added that the fund had accordingly informed its 180 client-organisations whose 37,000 employees have saved Sh28 billion, now under Zamara’s management.

Ms Kambuni also reiterated calls for the 65-year tax exemption rule be reduced to 60 years, saying this would be a major incentive for Kenyans to save more and alleviate suffering among retirees. “Most have no other source of income after retirement other than their savings that are used to meet medical costs for themselves and education expenses for their children. Exempting them from paying taxes will mean more money at their disposal to spend on their families’ well-being,” she said.

Meanwhile in the half year, Zamara said its investments witnessed a rebound with returns standing at between nine and 10 percent compared to a paltry 1.3 percent return during a similar period last year.

Zamara said its mixed-use real estate project in Kitengela continued to experience low uptake largely due to lack of credit access. It, however said it was optimistic that the interest rate law will repealed to unlock credit.