Liberty Kenya has introduced a retirement benefits solutions for retired Kenyans who want flexible investment returns and death benefits.
Dubbed, Ustaafu Income Drawdown, the plan is aimed at avoiding the risks and costs associated with self-investment and is available to individuals between the 50 to 80 years bracket.
“The plan comes with an ad hoc payment of Ksh300,000 or more in addition to the minimum single purchase amount of Ksh2 million,” Liberty Life Assurance managing director Abel Munda is quoted as saying by this report (Business Daily).
He added that this plan offers an alternative to guaranteed annuity with flexibility for one to choose where they want their funds spent.
The funds received, under this new plan from the customers will be invested into either the conservative or balanced portfolios offered and will be characterised by low risk while giving stable investment returns.
According to a news statement by the Star, the product is registered by the Retirement Benefits Authority, following an amendment to the Retirements Benefits Act to allow for Income Drawdown annuity as an alternative to guaranteed annuity.
The minimum draw-down period allowable is 10 years from the commencement date of the plan, after which a retiree can choose to continue with the investment, use the investment value to purchase a guaranteed annuity or convert it into a lump sum that the member can withdraw.
Mr. Munda went on to say that the product is informed by research on retiree’s needs for retirement solutions that can earn them good returns in their retirement.
The 2019 FinAccess survey released earlier in the year showed a drop in the share of Kenyans saving for retirement-one in four Kenyans age 16 and above save for old age-, a decline by half from two in five in 2016.