Suluhu Umbrella Scheme Assures Retirees of Medical Cover

Suluhu Umbrella Scheme Assures Retirees of Medical Cover

Suluhu Umbrella Scheme Bundles Pension with Health Insurance

Nairobi, November 1, 2018

Non-banking financial services consultancy Liaison Group has today launched a product that allows clients to enjoy medical cover in their retirement.

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Dubbed the Suluhu Umbrella Scheme, it is the first one in the Kenyan market to allow members to port their medical cover through their pension and income draw down in one platform.

Under the scheme, a member can contribute both for retirement and a medical plan, and on attaining the retirement age, the funds for retirement will be utilized to secure a retirement benefit while the medical fund caters for their medical cover fully on retirement. The scheme aims to allow members to port their benefits from any plan they have into their retirement on the same terms as they had before.

Registered under the Retirement Benefits Authority (RBA) and Kenya Revenue Authority (KRA), the Suluhu Umbrella Scheme offers a number of benefits to organizations and individuals: tax exempt contributions, attractive returns, accessibility (through SMS and online), simplified management, cost efficiency and availability to various employers.

Speaking during the launch, Liaison Group Managing Director Tom Mulwa said: “Suluhu Umbrella Scheme ensures that one is not just guaranteed a stable income in retirement, but also has a reliable medical cover. We have designed the scheme with inbuilt flexibility to allow members to port their current plans into retirement at the same terms. Most importantly, we have put in place a highly competent panel of service providers to ensure a high quality of service. The fact that the service providers are not related is also critical for good governance.”

The service providers on the Suluhu Umbrella Scheme are Liaison Financial Services as Scheme Administrator and Founder, KCB Bank as Corporate Trustee, NIC Bank as Custodian and Stanlib Kenya as Investment Manager.

“Suluhu Umbrella Scheme,” added Mr Mulwa, “is symbolic of Liaison Group’s strategic shift into an integrated non-banking financial services consultancy.”

The scheme is especially relevant against the backdrop of a ballooning national healthcare burden, especially for retirees and the old, largely driven by the ascendancy of lifestyle diseases in Kenya. Another relevant feature of the Kenyan market is the fact that most medical schemes are tied to employment contracts as a benefit and lapse on retirement.

Studies indicate that 60 per cent of an individual’s medical costs are incurred in retirement age. Unfortunately, due to their high risk, older people have had to pay high premiums to get medical insurance with some insurance providers not offering medical cover to people aged above 60.

A trend analysis report shows that health expenditure had grown to Sh73.2 billion by 2016 while the percentage of admissions for people over 65 years stood at 34 per cent in 2013 compared to 25 per cent a decade ago.

“This product demonstrates the kind of innovation we would like to see in the local pensions industry. As a regulator, we are committed in our resolve to ensure a supportive environment for such innovative products,” said Retirement Benefits Authority CEO, Nzomo Mutuku, who was Chief Guest at the launch.

Early this year, added Mr Mutuku, the RBA released Prudential Guidelines on the Management of Post-Retirement Medical Funds, to guide members, trustees and service providers on the conceptualization and running of Post-Retirement Medical Funds (PRMFs).

The guidelines have already been exposed to discussion by key stakeholders and the public and now await gazettement.

Note to Editors:

Founded in 1981, Liaison Group is an integrated non-banking financial organization. It provides, under one roof, a diversified suite of financial and risk management solutions, domiciled under four businesses: Risk and Insurance, Healthcare, Pension and Investment Consulting. The Group manages assets in excess of USD2 billion with global service points in at least eight countries and financial centers, including Kenya, Uganda, Tanzania, Rwanda, South Sudan, South Africa, China and United Kingdom.

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