Society
Kenyans Deserve To Retire Decently
By Priscah Motogwa
The retirement landscape in Kenya is changing . When I was younger , by the time someone retired , the last of their children had gotten a job and moved out of home . A retiree then packed all of his belongings from his city home and hauled them to his village home . Once in the village , the retiree would then adopt a less active life , perhaps volunteering to serve in the local church , school or coffee board . The retiree , would over and above his monthly pension , almost always , also receive some little upkeep money from his children . Life in retirement was generally simpler .
Today , the situation for most retirees is very different . First of all , there are those who upon attainment of retirement age , seek avenues to remain in the workplace for an elongated period . For some , they simply do not have enough savings to retire from active employment . For others , it is difficult to accept not having to go to an office , while that has been their life for the past so many years .
For those who eventually retire , most end up maintaining two homes ; one in the city and the other in the village . After having worked in the city for a very long time , the social networks of most retirees remain to be in the city . And instead of retiring to a lonely life in the village , they opt to keep two homes , only going to the village when they need to .
This situation is further exacerbated by the fact that many retirees nowadays tend to have one or more of their own children whom they have to support . The scarcity of jobs in the country has created a situation where young adults , who have completed their tertiary education , are still reliant on their parents for upkeep . The situation is made worse , where there
The scarcity of jobs in the country has created a situation where young adults , who have completed their tertiary education , are still reliant on their parents for upkeep . The situation is made worse , where there are grandchildren for whom retirees not only have to provide for their upkeep , but also cover their school fees .
are grandchildren for whom retirees not only have to provide for their upkeep , but also cover their school fees .
It is therefore not surprising at all that the last Pensioners ’ Survey conducted in 2022 by the Retirement Benefits Authority ( RBA ), found that a whooping 73 % of pensioners deemed their retirement benefits as inadequate . We all recall the Business Daily headline earlier this year which reported that Kenyan retirees had been ranked as the poorest globally , taking home an income way below the International Labour Organization ( ILO ) recommended income replacement ratio of 40 % -60 %.
When something is not working for us , we ’ ve got to change course and find the thing that works for us . Otherwise , if we stay the same course , it would be termed as insanity by Albert Einstein . It is time to rethink our approach to retirement issues in the country . It is time for a coordinated and collaborative multi-sectoral approach in addressing the cross-cutting issues that have proven to be an impediment to Kenyans accessing a decent retirement .
This article will focus on four such issues ! Taxation Regime
The pensioners who participated in the aforementioned RBA survey , recommended that retirement benefits should be paid without taxation . While it is appreciated that the Government needs to generate revenue , the taxation of pension benefits needs to be holistically reviewed with a view to achieving the right balance between the fiscal needs of the country and the economic well-being of retirees .
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