Liberty Life Assurance Kenya Managing Director Abel Munda and Pan Africa Christian University Vice Chancellor Prof. Margaret J. Muthwii during the launch of the Liberty Life’s income drawdown solution for retirees. [ Photo / business today ]

Liberty Life Assurance Kenya Limited has introduced a retirement benefits solutions targeting retirees seeking flexible income and death benefits without the risks and costs associated with direct investment.

Liberty’s new retirement investment, a flexible income drawdown named Boresha Ustaafu, offers a flexibly managed income to suit the changing needs of retirees. It is available to individuals aged 50 years and above and allows for ad hoc payments of Ksh300,000 or more in addition to the minimum single purchase amount of Ksh2 million.

The funds will be invested into either the conservative or balanced portfolios giving stable returns. 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 a guaranteed annuity.

The minimum drawdown 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.

Liberty Life Assurance Managing Director Abel Munda said the product is informed by research on retiree’s needs for retirement solutions that can earn them good returns. “This product offers an alternative to guaranteed annuity with flexibility for one to choose where they want their funds invested,” said Mr Munda.

Low retirement savings

The 2019 FinAccess Survey shows a drop in the share of Kenyans saving for retirement. Only one in four (23%) of Kenyans age 16 and above save for old age, a decline by half from two in five (44%) in 2016.

The National Social Security Fund (NSSF) Act 2013 is expected to increase the number of people saving for retirement and grow contributions to the retirement benefits schemes. The conversion of NSSF from a provident to a pension fund will also increase demand for retirement products that are more flexible with good returns.

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