Healthcare is one of the biggest financial challenges retirees face. While pensions provide income security, medical costs can quickly drain savings. To address this, Kenya’s Retirement Benefits Authority (RBA) introduced Post-Retirement Medical Funds (PRMFs), specialized savings vehicles that allow workers to set aside money specifically for healthcare in retirement.
A PRMF works by collecting contributions from employees (and sometimes employers) during their working years. These funds are invested, and upon retirement, members can draw on them to cover medical expenses such as hospital bills, outpatient services, chronic illness management, and even last expense benefits. Coverage often extends to dependents, ensuring that retirees and their families have access to quality healthcare without financial strain.
The importance of PRMFs lies in their ability to protect pension savings. Without a dedicated medical fund, retirees often end up using their pension income to pay for healthcare, leaving little for daily living. By ring-fencing medical savings, PRMFs safeguard financial independence and improve quality of life in retirement. They also reduce reliance on family support and ease pressure on public health systems.
One of the strongest incentives for PRMF participation is the tax advantage. Contributions of up to KES 15,000.0 per month qualify for tax relief, lowering the immediate tax burden for members. In addition, withdrawals from the fund to pay medical expenses are exempt from taxation. This dual benefit makes PRMFs one of the most efficient retirement planning tools available in Kenya—members save more while securing future healthcare.
For workers and employers alike, integrating PRMF contributions into retirement planning is a strategic move. It ensures that healthcare, often overlooked in financial planning, is adequately funded. Pension schemes that offer PRMF options demonstrate forward-thinking governance and a commitment to member welfare.
Cytonn Umbrella Retirement Benefits Scheme (CURBS) provides members with the option to contribute to a Post-Retirement Medical Fund. With tax relief on contributions up to KES 15,000.0 per month, CURBS empowers members to combine retirement income security with healthcare protection, delivering a holistic approach to financial well-being in retirement
