Retirees Inclusion: How Saccos Can Nurture an Aging Membership

By June Njoroge

Amajority of Savings and Credit Co-operative Societies, have had a daunting task, in trying to retain members, who are senior citizens, after retirement from formal employment.

This is due to the lack of financial products and services, that are specifically tailored for retirees; who rush to withdraw membership, in order to access their deposits, as they are devoid of a regular source of income, to commit and service obligations to their Saccos. Most retirees have been lifetime members of Saccos, therefore, they have substantial deposits, that could dent the share capital base of the Sacco if mass withdrawals are made.

According to the Sacco Subsector Demographic Study Report, conducted by the Sacco Societies Regulatory Authority (SASRA) in 2019, it indicated that members aged 65 years and above, were the least in the DT Sacco system and accounted for only a paltry 5.51%, of the total membership of 4.97 million. The age bracket between 51 and 64 years, was found to be the second least, at 17.63%.

SASRA CEO, Mr. John Mwaka noted from the study, that Saccos especially Teachers-based and Government –based, needed to design products and services, that resonate with their elderly members, between the age brackets of 51-64 years and above, in order to halt the apparent mass exit of members.

Saccos must learn and understand the demographic composition of their members, and use that information, to develop responsive financial products and services, unique to the specific needs of their members.

Most Saccos have been reluctant to develop products for retirees, because of the stringent rules, set by the Retirements Benefits Authority (RBA), which some are unable to meet. The complexity of pension-backed financial products, have

also slowed down Saccos in this regard.

However, with effective strategies in place, Saccos can nurture their aging members through:

• Developing Innovative Financial

Products and Services, tailored specifically for retirees. Elderly people have unique needs and cannot be compared with the younger demographic. Consequently, Saccos need to develop products and services, that appeal to senior members. For instance, with old age comes a myriad health problems, Saccos can introduce a savings product, targeted towards medical expenses, under a medical cover for recurrent illnesses. This would be a sure bet in retaining retirees. In addition, they should introduce unique features in the products and services, such as low minimum monthly saving contribution or none whatsoever, on condition that there is a dividend payment rate.

• Advising Retirees to channel their pension through the Sacco’s FOSA accounts. Saccos should ensure that they comply and adhere to the rules and regulations, set by the Retirements Benefits Authority (RBA), before allowing their members to process their pension earnings through their FOSA accounts.

• Provision of Advisory and Dividend

Management Plan. Retirees no longer have regular monthly income, to contribute to their savings, Saccos can provide a dividend management plan, whereby, deductions are made from the dividend income earned, to cater for the required monthly obligations, whilst the remainder, can be divided into monthly income.

• Education and Training to members who are nearing retirement. Saccos should conduct education and training sessions, to their elderly members, who are about to retire and inform them, how they can continue to benefit as members after retirement. Before doing this, Saccos should ensure, they have implemented the aforementioned financial products and services, that can appeal to and benefit retirees.

• Introduce an estate planning scheme Saccos should introduce this scheme for their senior members, who might be concerned about future security, in the event of an abrupt death. The member will be required to nominate their spouses, children or next of kin and any other preferred beneficiaries, to join the Sacco, whilst they are still alive. The beneficiaries would enjoy the credit facilities, on their behalf and in the event that they pass on, they stand to inherit the retiree’s deposits, with a set caveat, of the inability to withdraw all the deposits, but instead enjoy monthly incomes.

• Appoint Retirees as Mentors or ambassadors of the Sacco. Saccos should delegate retirees the roles of being mentors and ambassadors of the Sacco, whereby, they can advise younger members, on the importance of embracing a saving culture, through the Sacco. This empowers them and makes them feel appreciated; consequently, they would want to prolong their membership.