- PSSF is planning to introduce mortgage savings and post-retirement medical savings products for public servants.
- PSSF is also seeking to widen its membership by including contract workers in the public service, potentially increasing its asset base and investment capacity.
- The proposed products aim to connect retirement savings to pre-retirement milestones such as home ownership, while addressing rising healthcare costs faced by retirees.
The Public Service Superannuation Fund (PSSF), which has built an asset base of about Sh340.4 billion, is planning to introduce mortgage savings and post-retirement medical savings products as it seeks to expand the financial benefits available to its members.
Under the mortgage savings proposal, members would have an avenue to build savings specifically towards home ownership, offering public servants who struggle to raise the large deposits required to purchase property a more structured and predictable route towards becoming homeowners. The second proposal, post-retirement medical savings, targets rising healthcare costs faced by retirees, allowing public servants to prepare financially for medical needs after their working years.
The proposals come as PSSF also moves to widen its membership by seeking to bring contract workers in the public service into the scheme. The expansion would increase the number of workers covered by the fund while potentially boosting its asset base and investment capacity. The inclusion of contract workers could also help close a gap in retirement planning for employees whose terms of employment do not necessarily provide the same level of long-term financial security associated with permanent arrangements.
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The development is unfolding against the backdrop of ongoing public-service reforms, including efforts to strengthen payroll management and improve the way government manages its workforce and expenditure.
The proposed products point towards a shift from pension schemes being viewed largely as vehicles for accumulating money to be accessed after retirement, towards a broader model connecting retirement savings to important financial milestones before retirement, such as saving towards a house while still employed, alongside building a financial cushion for life after retirement.
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The impact of the new products will depend on their final design, including contribution requirements, eligibility, investment returns, access conditions and the cost of financing. With Sh340.4 billion already under management, PSSF has a sizeable financial base from which to pursue the planned expansion of its product offering.
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