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How Kenyans will access benefits before retirement
Visitors tour exhibition booths during the East African Pensions Conference & Expo 2025, held at the Kenyatta International Convention Center (KICC), Nairobi, on October 23, 2025.
Can I at present access benefits before hitting the retirement age?
Yes. Retirement benefits can be accessed early in two parts. Firstly, when an employee changes jobs, a portion of the benefits up to 50 percent is accessible for occupational pension schemes created by employers.
Workers can, however, tap their full pension benefits before age 50 on grounds of ill health or when migrating out of the country permanently.
Any other early access of pension benefits results in penalties including taxes that mirror the personal income tax bands.
What proposals is the RBA making on early access?
The RBA is pushing for the introduction of a two-pot system in the Kenyan retirement benefits sector, a target in the national retirement benefits policy (NRBP).
The legislative framework in the management and operations of pension schemes will be amended allowing for the creation of sub accounts which will allow workers to partially use part of their pension savings for utilities/needs.
The larger proportion of retirement savings will be locked away for retirement. Kenya will be following in the footsteps of countries such as South Africa in creating the two-pot system.
Where can one utilise the accessible savings?
The Retirement Benefits Authority (RBA) has not set a specific use of short-term savings as it allows for feedback in public participation but has outlined that it will allow each respective pension scheme to set uses for the short-term savings.
The regulator has, however, hinted at uses for household bills including buying a house, paying for school fees and medical bills.
What outcomes is RBA seeking by allowing early access to pensions?
RBA is betting on the sub-accounts to make pension schemes more competitive by allowing workers to make savings in the schemes for other uses such as house/car purchases.
The regular says the pension industry can deliver more competitive returns to savers compared to other savings and investment products such as chamas and money market funds (MMFs).
RBA further sees the changes as incentives that encourage members to opt for regular pension.
Why are workers only getting the sub-accounts now?
The Retirement Benefits Authority has acknowledged that workers face hardships such as the loss of income before attaining retirement age and continue to suffer from the difficulties despite holding what could sometimes be millions of shillings in their pension accounts.
Some Kenyans unfortunately die before accessing their pension benefits. In retrospect, RBA has identified the need to allow access to pension benefits but for uses of funds to be ring fenced by each operating scheme.
How does the South African two-pot pension system work?
Retirement fund members in South Africa make partial withdrawals from their retirement funds before retirement, while preserving a portion that can only be accessed at retirement to help improve retirement outcomes. The change has meant that workers are not forced to resign from their jobs to access part of their retirement benefit when they fall into financial distress.
What happens to the savings workers have made so far?
All retirement benefits/savings up to the adoption of new changes allowing the creation of sub-accounts will be subject to existing rules which put limits on early access.
To preserve the bulk of the current contributions, RBA is considering further proposals that could only allow access up to 30 percent of savings made under the partial access rules.
Why has RBA been hesitant in blocking partial pension access?
The RBA previously proposed to block most avenues of early access to pension benefits as it lamented the inadequacy of savings available to Kenyans upon retirement.
The combination of awareness on workers' needs and a pushback from the youth saw RBA drop a proposal to curb early access to the benefits in 2025.
Kenyan youth, most of whom belong in the Gen-Z grouping, blocked RBA’s attempt to limit early access to pensions, revealing that they had more immediate financial concerns such as buying a house which made retirement as a focus, secondary.
Older workers were, on their part, more supportive of preserving their pension savings.
Can I access my pension savings under NSSF?
Pension savings made to the National Social Security Fund (NSSF) are currently only accessible when a worker attains the retirement age. This could however change as the fund pushes to regularise the NSSF Act of 2013 with pension scheme rules allowing for partial early access.
Upon adoption of the changes, savings made under NSSF will be no different to savings sitting in regular occupational/umbrella schemes allowing for early access to benefits under established rules.
How soon could we see the changes creating sub accounts in pension schemes?
The proposals by RBA will likely form part of new policy proposals to be moved under the Finance Bill of 2026 which is expected at the end of April this year.
