Post Retirement Medical Fund

Objectives

  1. To help employees spread the cost of medical care so that it becomes manageable in their retirement age.
  2. Create a platform to facilitate the need of the retiring members access affordable medical coverage .
  3. Cater for the continuation of medical coverage for members who leave before attaining retirement age.
  4. Comply with existing retirement benefits legal framework, including the Post-Retirement Medical Funds guidelines issued by the Retirement Benefits Authority.

Collection of Contribution

Collections will be through the payroll system based on completed application forms by each members.

Coordination of Administrative Function

This will involve collection of data, record keeping and issuance of benefit statements to members by the administrator.

Medical Cover Services Provision

  • Member to utilize PRMF fund to purchase medical cover from an insurance company
  • Member to utilize PRMF to purchase an annuity and use annuity income to purchase medical cover from an insurance company

Investment Management

The investment of the funds will be regulated by RBA. This will initially utilize the investment policy of the scheme and a separate investment policy will be prepared once the funds exceed Kshs.50 million.

Key Features

A defined contribution PRMF embedded within the Pensions fund:

  1. Membership to PRMF is voluntary
  2. Members who join PRMF to contribute a minimum of 1% of pensionable salary
  3. Periodic reviews recommended to advise on suitability of contribution amounts
  4. Retiree purchases the desired level of benefits
  5. Medical benefits dependent on accumulated savings at retirement

Benefit provision through purchasing desired medical cover on retirement by:

  • Drawdown on accumulated PRMF benefits or
  • From annuity income where the annuity is purchased using accumulated PRMF benefits

 

 

Outpatient Benefit

 200,000 150,000 100,000 50,000 50,000

Inpatient Benefit

 5,000,000 3,000,000 1,000,000 1,000,000 500,000
Members Age (Years) Period to Retirement (Years) M M+1 M M+1 M M+1 M   M M+1
20 40 6,600 11,611 5,709 10,049 4,213 7,422 3,769 6,444 3,140 5,279
25 35 7,600 13,372 6,575 11,573 4,852 8,548 4,340 7,421 3,616 6,080
30 30 8,900 15,568 7,699 13,551 5,682 10,009 5,082 8,690 4,234 7,120
35 25 10,675 18,782 9,235 16,255 6,815 12,006 6,096 10,424 5,079 8,540
40 20 13,283 23,368 11,490 20,255 8,480 14,939 7,585 12,969 6,320 10,626
45 15 17,552 30,880 15,184 26,726 11,206 19,741 10,024 17,138 8,351 14,041
50 10 25,979 45,706 22,474 39,558 16,586 29,219 14,836 25,367 12,360 20,783
55 5 51,041 89,799 44,155 77,719 32,587 57,406 29,148 49,838 24,284 40,832
60* 0 2,912,224 5,123,224 2,519,124 4,434,030 1,859,127 3,275,109 1,662,957 2,843,372 1,385,469 2,329,541