Retirement Benefits Authority (RBA) chief executive Nzomo Mutuku. FILE PHOTO | NMG
The pension industry regulator says mortgage loans regulations
are undergoing a review to allow scheme members to use a slice of
savings to buy houses.
Retirement Benefits Authority
(RBA) chief executive Nzomo Mutuku said pension savers would benefit
once the guidelines are gazetted.
“The amendment to the
RBA (Mortgage Loan) regulations is under way and will advise
stakeholders once Treasury CS Ukur Yatani gazettes the amendment,” said
the RBA boss.
President Uhuru recently assented to the
amended Section 38 of the Retirement Benefits Act (1997) allowing
pensioners to use part of the retirement benefits to buy residential
houses.
Mr Mutuku hailed the move, saying it would
increase home ownership where pension savers will be able to own a house
during their working life.
While the Housing and Urban Development ministry vouched for
release of up to 60 percent of individual’s savings for buying a house,
the RBA regulations are expected to clear the air over the allowable
limit as well as set out conditions for accessing the pension savings.
Meanwhile, pension stakeholders have called for caution in allowing workers to access savings before retirement.
Association
of Retirement Benefit Schemes chairman Simon Nyakundi said this risks
leaving many penniless and unable to meet daily expenses.
“No
saver should be allowed to wipe out all their savings since upon
retirement at 60 years, one needs an income replacement ratio,
equivalent to about 70 percent of their last income available for
personal use in the next 20 or more years. Pension is meant for old-age
dignity and comfort,” he said.
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