Oral East Africa“When my children started learning, I bought a scrabble set and a dictionary to help them pick up on spellings. Today all my children are good at langauges, my son even took up French,”
I think it is the game that awakened them.
Now that his children have all flown out of the roost, Mr Andabwa says he rarely plays as much as he used to.
Whenever he can he goes to Masinde Muliro University in Kakamega and plays there against the young ones while worrying about insurance.
The punishment on savings
When he left employment he was guaranteed insurance up to the age of 80. He says the terms were changed to 70 years and now they only managed to fight for a concession for up to 75 years.
The anxiety as he approaches the cut off age with all the burdens of old age starting to knock on the doors is unsettling for him.
In 2010 Mr Andabwa suffered cancer of the stomach. At the time cancer was a very costly diseases with very few oncologists. The treatment cost Kes150,000 a month excusive of doctors, drugs and hospital fees.
When he applied for support from his former employer, the bank told him his condition was not covered by corporate social responsibility.
“This is the time you think, is there anything I could get from my former employer?” he says.
Savings culture
During his time, employees worked for more or less the same company their entire lives and secured a pension.
The assumption was that the money would be enough to cater for your needs as you grew old, but the reality is quite contrary.
Most Kenyans receive very small pensions that struggle to keep up with rising prices of basic goods and healthcare.
While it is international practice to protect the elderly against inflation, some local schemes do not.
When it was still just good old Barclays, forced to adhere to some standards for its workers globally, Mr Andabwa and his colleagues enjoyed protection against inflation.
Kenyan standards
He said during the earlier days, whenever Barclays Bank of Kenya made profits, they would give pensioners ‘something’, a cost of living adjustment.
But as the bank management changed including its structure, shifting to Absa Bank Kenya some of those safety nets were thrown out.
According to Barclays Bank of Kenya LTD Pensioners’ Association (BBKPA), although Barclays Bank Association, had signed an agreement with their former sponsor, BBK, for the cost of living adjustment ABSA bank have refused to honour it.
They insisted that while the law allows them to have their pension payment reviewed for increase after every three, their pension fund had changed the rules to make it discretionary.
COLA—or a change in one’s monthly retirement benefit to account for increasing prices was to cushion them against the erosion of their purchasing by inflation.
They felt that after devoting years serving the bank, diligently setting aside their earnings for old age, it was callous that Absa Bank, a Pan African lender with presence in 12 countries and a half a trillion balance sheet, had found it costly to take care of their interests after they had retired.
When the pensioners discovered that I worked in media, they told my father to get his son to help out. At the time I was in between jobs, so I could not quite help them. So I tried as much as I could to convince other journalists that the story of the implication of inflation on pensioners was huge, but unexplored.
And they had proof to indicate it was not just a hunch.
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Negative returns
The pensioners say consultants Joanna Combrink and Colin Southey told Absa Bank Kenya the purchasing power of the Absa Staff Pension Fund beneficiaries had decreased substantially (around 50 percent over the last 13 years).
Kenya’s pensioners are losing money on their savings. A survey by Actuarial Services East Africa (Actserv) and pension fund administrator Zamara shows pension schemes made a weighted average return of 1.4 percent in 2023, which was lower than the 1.7 percent return recorded in 2022.
At the time, Kenya’s average inflation in 2023 stood at 7.7 percent, meaning that the average saver lost value in real terms.
This has pushed the Kenyan senior citizens to rank as the poorest globally according to Allianz, without sufficient income to cater for their staples and medicine in the sunset years.
Today more than 82 percent, have gone back to work., according to the Kenya National Bureau of Statistics (KNBS) quarterly jobs report that showed that 776,159 of 869,338 people above the age of 60 were in active employment in December.
As the government takes up at least 20 percent of payslips in deductions, and tax induced inflation takes up the rest, the disposable income that would go to savings is narrowing. It does not help when young Kenyans see that it does not pay to save.
“Inflation actually chews up your pension, unless they legislate to adjust it to inflation. Well, we will be better than those who have nothing coming, but it will not be much,” Mr Andabwa said.
He is not a man who is used to have expectations on the younger generation on how to take care of the elderly.
So he adds that although it sounds careless that they relied on pensions alone, at the time of retiring, some of them were not properly prepared.
“A lot of us tried going to business and got burned,” he said.
