The board of Sanlam Kenya Plc. has approved the commencement of a Voluntary Early Retirement (VER) scheme in a business turnaround plan expected to provide more than Ksh200 million in savings.
Staff costs at Sanlam grew by 26 per cent in 2018 to Ksh943 million from Ksh746 million in 2017. Furthermore, the firm’s cost trajectory had a compounded annual growth rate of 8 per cent over the last four years from Ksh1.4B in 2015 to the current Ksh2B in 2018.
According to Sanlam Kenya Group CEO, Dr. Patrick Tumbo, the voluntary retirement plan will offer permanent and pensionable staff members aged over 50 years an opportunity to apply within one week between 26 September and 4 October.
In addition, employees who sign up for retirement program will be released from the company’s employment effective 31st October 2019. The scheme will only affect Sanlam General Insurance and Sanlam Life Assurance.
Under the early retirement program, Sanlam is offering a severance pay equivalent to one (1) month’s salary for every three years of service. On top of that, the firm will offer successful applicants’ compensation for unused leave days.
Furthermore, the non-bank financial services firm will offer a 30 per cent loan rebate on the balance of any outstanding in-house staff loans.
Exiting employees will also receive pension benefits in accordance with the Pension Scheme Trust rules and Retirement Benefits Authority (RBA) regulations.
Moreover, employees who take up the scheme will work until the end month (31st October) while their medical cover will run until the end of the year.
The early retirement scheme will lead to cost containment and result in revenue growth in the short and medium-term.