The world over, there is growing uncertainty of Social Security and Pension Benefits. Indeed, government-sponsored retirement is no longer reliable. Coupled by the fact that the world's populations are continuing to age, with fewer and fewer working-age people remaining to contribute to social security systems, especially so in developed economies. Pension schemes are getting stretched by the day. Greater and greater burdens are being placed on the pension system, as more and more people retire and, due to advances in health care, are living longer than ever before. Governments have no other viable option but to reduce social security benefits or suspend them altogether for all but the poorest of the poor. In Kenya, the trend led to an increment in the retirement age from 55 to 60 in a bid to consolidate the budget for retirees. On the other hand private pension plans are not immune to shortcomings. Corporate collapses, such as the high-profile bankruptcy of Enron at the turn of the century, can result in your employer-sponsored stock holdings being wiped out in the blink of an eye.
Similarly, defined-benefit pension plans which are supposed to guarantee participants a specified monthly pension for the duration of their retirement years, actually do fail every now and again, sometimes requiring increased contributions from plan sponsors, benefit reductions, or both, in order to keep operating.
Today, many employers who used to offer defined-benefit plans are now shifting to defined-contribution plans because of the increased liability and expenses that are associated with defined-benefit plans, thus increasing the uncertainty of a financially secure retirement for many. These uncertainties have transferred the financing of retirement from employers and the government to individuals, leaving them with no choice but to take their retirement planning into their own hands.
The Kenya School of Government prepares employees both in the public and private sector for retirement. During the official opening of one such a training involving employees of Kenyatta National Hospital at the Matuga Campus, a Senior Assistant Director at the hospital’s Supply Chain Management Department, Mrs. Rose Mugambi Njoroge, told the officers not to take their retirement plans lightly. The pre-retirement course is conducted to prepare officers for a smooth transition from employment to retirement. It helps to prepare employees psychologically, financially and socially so that retirement does not come as a surprise.
“On behalf of Kenyans we thank you for your selfless service to this great nation for more than thirty years,” she told them. Mrs. Njoroge assured the Hospital’s employees’ that retirement is not the end of life. She passionately assured them that training would answer many lingering questions in their lives and shape their ideas to enable them manage life diligently during their retirement period.
By Daniel Ngeti