Suluhu Umbrella Scheme, allows members to port their medical cover through their pension and income drawdown in one platform.
Kenya is set to have regulations in place to boost medical care for retirees according to the Retirement Benefits Authority (RBA).
Nzomo Mutuku, chief executive officer RBA, says the authority has initiated a consultative process to develop guidelines to govern the Post-Retirement Medical Fund (PRMF).
“The draft guidelines have gone through an elaborate stakeholder consultation process and were exposed to the discussion by members of the public nationwide. The guidelines were subsequently approved by the attorney general and the national treasury and are now awaiting final gazettement,” Mutuku said during the launch Liaison Group launched its insurance scheme that will allow clients to get medical cover in their retirement.
Dubbed the Suluhu Umbrella Scheme, the scheme is the first in the Kenyan market that allows members to port their medical cover through their pension and income drawdown in one platform.
Under the scheme, a member can contribute both for retirement and a medical plan, and on attaining the retirement age, the funds for retirement will be utilized to secure a retirement benefit while the medical fund caters for their medical cover fully on retirement.
Group Managing Director Tom Mulwa says the scheme comes against a backdrop of increased national healthcare burden, especially for retirees and the old, largely driven by the rise of lifestyle diseases in Kenya.
“Suluhu Umbrella Scheme ensures that one is not just guaranteed a stable income in retirement, but also has a reliable medical cover. Most importantly, we have put in place a highly competent panel of service providers to ensure a high quality of service. The fact that the service providers are not related is also critical for good governance,” Mulwa said.
Studies indicate that 60 percent of an individual’s medical costs are incurred in retirement age. Unfortunately, due to their high risk, older people have had to pay high premiums to get medical insurance with some insurance providers not offering medical cover to people aged above 60.
A trend analysis report shows that health expenditure in Kenya had grown to KSh73.2 billion by 2016 while the percentage of admissions for people over 65 years stood at 34 percent in 2013, compared to 25 percent a decade ago.
“This product demonstrates the kind of innovation we would like to see in the local pensions industry. As a regulator, we are committed in our resolve to ensure a supportive environment for such innovative products,” said Retirement Benefits Authority CEO, Nzomo Mutuku.
The service providers on the Suluhu Umbrella Scheme are Liaison Financial Services as Scheme Administrator and Founder, KCB Bank as Corporate Trustee, NIC Bank as Custodian and Stanlib Kenya as Investment Manager.
