Enwealth to Empower Pension Scheme Members

BQ Reporter February 3, 2022

Players in the Kenyan real estate sector are positioning themselves to capture the untapped pension scheme membership market looking to utilize their retirement savings to acquire homes, as the concept of pension-backed mortgages takes root in the country.

Enwealth Financial Services, the first pension administration firm to introduce to market a pension-backed mortgage product, hosted over 200 real estate developers and hundreds of schemes members in a home ownership expo dubbed “Rent No More Ukiwa na Pension”.The expo was held on Saturday at the Enwealth Business Center along Ngong Road.

The recently enacted Retirement Benefits (Mortgage Loans) (Amendment) Regulations, 2020 permits members of retirement benefit schemes to utilize a portion of their accrued retirement benefits to purchase a residential house from an institution pension. Members can access amount not exceeding 40% of their accrued benefit, subject to a maximum of Ksh. 7Million. In 2021, Enwealth Financial Services and Co-op Bank partnered to offer pension backed mortgage loans.

Speaking during the first Expo, Enwealth CEO Mr. Simon Wafubwa expressed delight in the possibility of more Kenyans becoming home owners, “One of the biggest obstacles to home ownership has been the high cost of property in our country. We are glad that there is a gradual positive shift both in terms of the financial products we are able to provide and in the quality and diversity of homes the real estate developers are offering”.

In the past, workers have had to utilize a significant portion of their retirement lumpsum to purchase or build their retirement home. This often jeopardizes the retirees’ financial security.

The retirement benefits sector has an enormous Sh1.3 trillion in asset base. In a recent survey by the Retirement Benefits Authority, 68 per cent of respondents indicated a willingness to access the pension backed mortgages.

“We are trying to make a difference by empowering our people, most of pension scheme members retire without houses and they use their savings to build houses but we are changing this narrative, “Enwealth CEO noted.

He said that they will continue creating public awareness that they can now invest using their pension saving upto to a level allowed by the government.