The Retirement Benefits (Mortgage Loans) (Amendment) Regulations, 2020 (the "Regulations") signed by the Cabinet Secretary for National Treasury & Planning on 14 September 2020 were published in the Kenya Gazette of 9 October through Legal Notice No. 192 of 2020.

Under the Regulations, members of retirement benefit schemes are allowed to utilise a portion of their accrued retirement benefits to purchase a residential house from an institution. An institution is defined as including banks, mortgage or financial institutions, building societies, microfinance institutions, the National Housing Corporation, other institutions approved by the Retirement Benefits Authority or any other entity offering a residential house for sale. 

The portion of accrued benefits to be utilized towards this purpose should be the lower of: -

• in a Defined Contribution Scheme, an amount not exceeding 40% of the member’s accrued benefit, subject to a maximum of Ksh. 7Million;
• in a Defined Benefits Scheme, an amount not exceeding 40% of the accrued benefits as determined by an actuary, subject to a maximum of Ksh. 7Million; or
• the purchase price which shall not exceed the market value of the property being purchased, excluding transaction costs and applicable taxes.

A member can use the accrued benefits to purchase a residential house only once and only in respect of a residential house that has been certified for occupation by the relevant authorities before the intended purchase. 

The following members are excluded from enjoying this benefit:

• a member who is paid a pension by the scheme; or
• a member who has taken early retirement; or
• a member who has attained retirement age.  

Retirement benefits schemes are therefore encouraged to take the necessary steps to amend their scheme rules within 12 months from the date of commencement of the Regulations (14 September 2020), in order to comply with the above Regulations.