Workers and employers will be required to make mandatory contributions to post-retirement medical insurance schemes under a draft government policy meant to sustain access to health services by pensioners.The government says it will review the current post-retirement medical insurance schemes framework to provide for mandatory contributions by both members and sponsors.The plan is part of the proposals contained in the draft National Retirement Benefits Policy by the RBA, which has been put out for public comments starting later this week.Post-retirement medical schemes allow individuals to make contributions while in employment and utilise the savings to meet medical costs after retirement.Read: Post-retirement medical funds attract few takersContributors are not allowed access to the benefits whilst in employment and only acquire access upon retirement.At present, post-retirement medical insurance contributions are voluntary and are governed under the Post-Retirement Medical Funds Regulations which first came into effect in October 2018.But the government is concerned that medical insurance providers are often reluctant to provide medical insurance to retirees.“Upon attaining retirement, most members of schemes lose their medical insurance offered by respective previous employers. Medical insurance providers are often reluctant to provide medical insurance to retirees, or if they provide, the premium is often expensive,” says the draft policy.“With the advancement of age, most retirees’ health starts to deteriorate, exposing them to expensive medical schemes. Schemes lack adequate structures to provide post-retirement medical products for the ageing population.”The policy, if approved, will further erode employees’ net take-home pay, adding to recent adjustments in existing statutory deductions, the housing levy and a runaway high cost of living.Employers would meanwhile be required to match the contributions increasing the cost of doing business amidst increased matchups to NSSF statutory deductions.A post-retirement medical fund can be set up through three means including as a standalone entity, as an extension to an existing pension fund and as an insurance policy.Read: Clever things Kenyans are doing to plan for retirementThe government is further set to enhance the framework regulating savings for post-retirement medical benefits in retirement benefits schemes and run a campaign to educate the public on the benefits of saving for post-retirement medical covers.→ kmuiruri@ke.nationmedia.com Provided by SyndiGate Media Inc. (Syndigate.info).
