By 
The pension industry regulator says mortgage loans regulations are undergoing a review to allow scheme members to use a slice of savings to buy houses.
Retirement Benefits Authority (RBA) chief executive Nzomo Mutuku said pension savers would benefit once the guidelines are gazetted.
“The amendment to the RBA (Mortgage Loan) regulations is underway and will advise stakeholders once Treasury CS Ukur Yatani gazettes the amendment,” said the RBA boss.
President Uhuru recently assented to the amended Section 38 of the Retirement Benefits Act (1997) allowing pensioners to use part of the retirement benefits to buy residential houses.
Mr Mutuku hailed the move, saying it would increase home ownership where pension savers will be able to own a house during their working life.
While the Housing and Urban Development ministry vouched for release of up to 60 per cent of individual’s savings for buying a house, the RBA regulations are expected to clear the air over the allowable limit as well as set out conditions for accessing the pension savings.
Meanwhile, pension stakeholders have called for caution in allowing workers to access savings before retirement.
Association of Retirement Benefits Schemes chairman Simon Nyakundi said this risks leaving many penniless and unable to meet daily expenses.
“No saver should be allowed to wipe out all their savings since upon retirement at 60 years, one needs an income replacement ratio, equivalent to about 70 per cent of their last income available for personal use in the next 20 or more years. Pension is meant for old-age dignity and comfort,” he said.
Credit: BusinessDaily
Comments