The Central Organization of Trade Unions (COTU) has cautioned Kenyan workers against falling prey to the “honey trap” by the government allowing them to use up to 40 percent of their pension savings to buy a house.
In a statement, COTU secretary-general Francis Atwoli said that the move could land many into trouble after retirement, since they might not have enough to take care of themselves.
“Even though owning a house is a dream for many Kenyans, it might not be a need. The want, however, when one retires, is that they have money to help them buy food, medicine, live a comfortable life, and generally take care of oneself. Put differently, the essence of a pension saving, once in employment, is to take care of oneself upon retirement. The savings are for old age,” said Atwoli.
“It therefore defies logic to use money meant to benefit oneself at old age while they are still young. Looking at it holistically, this will put a lot of pressure on the youth to take care of their ageing parent at the behest of their individual personal development.”
Atwoli urged the youth to use other means to fund their dream of owning homes, and leave their pension contribution for their latter years.
“Whilst still working, one can have other means of raising funds to facilitate them buying a house. But it would be irresponsible for one to wag till retirement, for their pension money, to purchase a house,” he added.
According to Atwoli, if the government would want Kenyans to enjoy the comfort of owning a house when they are still young and working, they should deal with corruption, have better salaries and come up with policies that will have a positive domino effect and grow the economy.
“As COTU we support the President in his efforts to actualize the Affordable Housing agenda, under the Big Four, but we would like to advise the government not to lure Kenyans into exhausting their old-age savings in the name of owning a house because such a move will leave hundreds of retired Kenyans vulnerable without any savings,” he concluded.
According to the regulations, Kenyans will access up to 40 percent of their accrued benefits for residential house purchase provided the sum shall not exceed seven million shillings.
However, scheme members already receiving pension earning, members already on early retirement, and those that have attained the retirement age will not benefit from this new provision.