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The law allows members of retirement benefits schemes to utilise 40% of pension savings for the purchase of residential houses.
- Pension schemes were given 12 months to domesticate the regulations and guide their members on how to access the funds.
Image: FILE
The National Social Security Fund is considering allowing its members to use their savings as security for mortgages in line with President Uhuru Kenyatta's housing agenda.
Speaking when the pension fund received the Business Continuity Management System BCMS 22301:2019 certification from the Kenya Bureau of Standards (KBS), NSSF chair Julius Karangi said the plan is in top gear.
''This was in the plan before Covid-19. We are going to work around this to ensure members receive the necessary support to built houses for their families,'' Karangi said.
A similar position was expressed by Labour Cabinet Secretary Simon Chelugui who said NSSF plans to comply with the Retirement Benefits (Mortgage Loans) (Amendment) Regulations 2020.
The law passed by the Parliament in September last year allows retirement benefits scheme members to utilise 40 per cent of pension savings for the purchase of a residential house or 60 per cent as mortgage security.
Pension schemes had 12 months to adopt the regulations and guide their members on how to access the funds.
However, scheme members already receiving pension earnings, members on early retirement, and those that have attained the retirement age will not benefit from this provision.
Out of 500,000 housing units promise in 2017, the government has only delivered 228, hence the need to stimulate buyers and developers. Corporate tax on developers has been slashed by 50 per cent.
In addition, inputs for affordable housing construction are now exempt from Value Added Tax (VAT) and approval fees for such projects waived.
Recent home-loans market surveys singled out upfront cash requirements as one of the major obstacles to the market's growth.
The Central Bank of Kenya’s latest survey shows mortgage penetration in Kenya currently stands at 4.3 per cent of the GDP compared to developed nations, which is above 50per cent.
The country has 15 mortgage lenders in the market with only 22,000 mortgages.
In 2014, NSSF announced plans to build 30,000 houses in Mavoko, Machakos County to tap growing returns from real estate and reduce its reliance on the Nairobi bourse.
The plan was selected as one of the flagship projects under the vision 2030—which seeks to turn Kenya into a middle class country by 2030, way before the launch of the Big 4 Agenda by the Jubilee administration in 2018.
The houses were to be built on a 960-acre piece of land complete with necessary infrastructure under the Public-Private Partnership (PPP).
Yesterday, the pensioner said it is still sourcing for partners to undertake the project.
The ISO certificate received by NSSF is the first of its kind for state agencies in the country and only Kenya's leading mobile phone network provider, Safaricom has a similar standard.
It bundles interrelated methods, procedures and rules to ensure that critical business processes keep running in the event of damage or emergencies and continuously develops and improves them.
The ISO 22301:2019 standard requires organisations to not only develop high-level strategies to ensure business continuity but also to define solutions to handle specific risks and impacts relevant to continuity.
NSSF boss Anthony Omerikwa termed the receipt of the standard as a testament to the agency's sound management and zeal to give quality services to members.