Small firms to save for old-age medical cover

Small companies and individual businessmen will now have a chance to save for post-retirement medical cover under a new proposal contained in Treasury Secretary Henry Rotich’s Budget statement presented in Parliament.

Mr Rotich on Thursday proposed that small-scale businesses, which generally consolidate their retirement benefits under one administrator, will also be allowed to begin making contributions for post-retirement medical funds.

The scheme was introduced last year to promote better health care for retirees.

“Last year, I introduced amendments to allow contributions for post-retirement medical funds in the Occupational and Individual Retirement Benefit Schemes Regulations. I propose to further amend the Umbrella Retirement Schemes Regulations to allow members of the Umbrella Retirement Benefits Schemes to contribute towards Post-Retirement Medical Fund. This will also contribute to the achievement of Universal Health Coverage,” Mr Rotich said in his 2019/2020 Budget speech.

Umbrella retirement schemes pool investments that are managed on behalf of multiple employers, an option favoured by small companies who target to reduce the average cost per member while enhancing overall returns and benefits to the employer and employees.