Changing jobs is a normal part of modern working life. People move between employers for better pay, new challenges or improved conditions. But while most people think carefully about salary when switching roles, the pension is often an afterthought. What happens to the money you have already saved? And what should you do next? These are important questions with answers worth knowing.
The good news is that your pension does not disappear when you leave a job. The money you have contributed, along with any employer contributions, belongs to you. It stays in the scheme and continues to be invested until you are ready to access it at retirement. Leaving a job does not mean losing your pension. It means deciding what to do with it.
Your options depend on the type of scheme you were in. In a defined contribution scheme, your pot is made up of your contributions, your employer’s contributions, and investment returns earned over time. When you leave, that pot stays in the scheme until you move it or access it at retirement. In a defined benefit scheme, the benefit you have built up is preserved based on your salary and years of service at the time you left. This is called a deferred pension.
In Kenya, pension schemes registered with the Retirement Benefits Authority have clear rules about what happens when a member leaves employment. Members are generally entitled to their own contributions at any point. Access to employer contributions, however, may depend on how long you were part of the scheme. This is known as a vesting period. It is the minimum length of service required before employer contributions become fully yours. If you leave before this period ends, you may only be entitled to your own contributions and the returns on them.
Vesting rules differ between schemes. Some schemes make employer contributions available from day one. Others require a minimum period of membership, sometimes two or three years, before those contributions are fully yours. Checking the vesting rules of your scheme before handing in your notice is a step that many people miss but few regret taking.
When you join a new employer, you will usually be enrolled into their pension scheme. This means you may end up with savings sitting in two separate schemes. Over a long career with several employers, it is easy to accumulate multiple pension pots in different places. Each pot keeps growing on its own. This is not necessarily a problem, but it can make retirement planning harder to manage.
One option is to transfer your old pension savings into your new scheme. This brings everything into one place and makes it easier to track. In Kenya, transfers between registered schemes are allowed under the Retirement Benefits Act. You request a transfer value from the old scheme and instruct it to be moved to the new one. Both administrators need to be involved and the process can take time, so it is worth starting early.
Before transferring, think carefully about what you might be giving up. In a defined benefit scheme, the preserved pension you have built up may be worth more than it appears. Transferring out means exchanging a guaranteed retirement income for a cash value. That is a big decision. It should not be made without proper financial advice.
Transferring a defined contribution pot is generally more straightforward. The key things to compare are the fees charged by each scheme, the investment options available, and the overall track record of the scheme. Moving to a scheme with higher charges or fewer investment choices could reduce the long term value of your savings, even if the transfer itself goes smoothly.
You can also leave your old pension where it is. The money stays invested in the old scheme and will be available at retirement. It will grow through investment returns rather than new contributions. The main risk is losing track of it. After several job changes, people sometimes forget the details of old schemes and struggle to trace their savings years later.
This is why keeping records matters. Each time you leave a job, write down the name of the scheme, the administrator’s contact details, your membership number, and the approximate value of your pot. This small habit can save a great deal of trouble when retirement approaches and you need to bring all your savings together.
Every job change is a good time to review your pension. It is a chance to check how your retirement savings are growing, understand your options, and make clear decisions. Your pension is one of the most valuable things you will ever build. Treating each career move as a reminder to check on it is a simple habit with long term rewards.
