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One of the key risks that retirees face globally upon retirement is the high cost of medical bills. The risk is escalated by the fact that medical costs increase at a pace greater than that of consumer price inflation. By extension, financing health care cost in Kenya remains a critical challenge for retirees, family and the government where subsidies exist.

  Health insurance coverage is particularly important to older individuals given their vulnerability to old-age related sicknesses. Worse still, most retirees will have enjoyed the comfort of a medical cover provided by employers during working years. The medical cover provided usually ceases on retirement.  Consequently, most retirees have to come up with ways of bridging the gap including financing medical bills using their pension income.

 Provisions under the Retirement Benefits Regulations

 As part of resolving this growing challenge, in 2016 the government through the National Treasury introduced provisions in the retirement benefits regulations to facilitate savings for medical benefits in retirement. In particular, the provisions allow members of retirement benefits schemes to contribute to a medical fund to be used to either purchase a medical cover or directly offset medical bills in retirement. It also allows members of retirement schemes to assign a portion of their retirement benefit (income/cash lump sum) to a medical fund.

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