The High Court ruling last week that stopped workers from accessing up to Sh7 million or a maximum of 40 per cent of their retirement savings to buy their first residential houses shouldn't distract from the objective of the policy.
Justice Anthony Ndung’u found changes to the law that allowed early access to pension savings for home ownership were not subjected to public participation in breach of the Constitution.
We urge the National Assembly to review the process and ensure all stakeholders are involved in making a new law which will help Kenyans access part of their pension for buying homes.
The clause allowing contributors to access 40 per cent of their savings ahead of retirement was expected to free tens of billions of shillings for home ownership given that Kenya’s pension schemes control over Sh1 trillion spread across property, cash, shares and government bonds.
The suspension, therefore, is a setback to workers that were already planning to purchase their first homes through the programme.
The proposed changes to the pension laws, therefore, were meant to make it easier for individuals to buy their first homes given that most workers are unable to raise the minimum house purchase deposit or afford the typical monthly mortgage repayments.
Owning a home while still working is the first step to alleviating old-age poverty for a majority of families that spent most of their active years in employment.
Killing the policy entirely will lock out many workers who were already seeing it as a route to owning a home.
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