What if the pension you spent thirty years building becomes insufficient because of the healthcare you need in retirement?

You contributed faithfully. Your employer remitted the deductions. The trustees oversaw the fund. Your retirement benefits were calculated correctly and paid on time.

By every conventional measure, the system worked.

Then came the recurring prescriptions, specialist consultations, diagnostic tests and a hospital admission.

Your pension still arrives. But the money available for food, housing and everyday life keeps shrinking.

Can we call a retirement arrangement adequate if essential medical care leaves a member unable to meet other basic needs?

In Conversation 4, we explored why retirement adequacy must encompass financial security, health, housing, relationships, purpose and dignity.

Conversation 5 brings healthcare into sharper focus—and advances a proposition:

Pension scheme design in Africa should explicitly address post-retirement healthcare financing, with a Post Retirement Medical Fund as a core design consideration.

The discussion should begin when members are building their retirement benefits, giving them time to prepare.

The Expense That Can Undermine the Retirement Plan

Consider a purely illustrative example.

A retiree receives KES 60,000 a month. Essential household expenses absorb KES 42,000, leaving KES 18,000 for other needs and contingencies.

Now introduce KES 15,000 in recurring medical expenses that are not reimbursed.

The monthly margin falls to KES 3,000.

The pension remains exactly as projected. The retiree’s financial security has changed substantially.

A replacement ratio can tell us how retirement income compares with previous earnings. It cannot, on its own, tell us whether that income remains sufficient after healthcare expenses.

We need to ask what the pension can sustain after the member has paid for essential care.

The wider context is sobering. In its Universal Health Coverage Day 2025 message, WHO’s Regional Office for Africa reported that more than 423 million people in Africa experienced financial hardship from out-of-pocket health spending in 2022. These figures concern the wider population, rather than retirees alone, but they demonstrate the financial exposure within which retirement takes place.

For a person whose employment income has ended, recovering from a major expense may be particularly difficult.

And the pressure can build through ordinary, recurring costs long before a medical emergency occurs.

The Transition We Should Prepare for Earlier

Where medical cover is linked to employment, retirement can bring a significant change in protection.

What continues after the final working day? Who pays the premiums? Is a spouse still covered? Which services remain accessible? What costs must the retiree meet personally?

Arrangements differ across countries and employers. Yet every member deserves clear answers before retirement.

We devote considerable attention to the transition from salary to pension. The transition from employer-supported healthcare to post-retirement medical provision deserves comparable attention.

A farewell seminar provides limited help if a member discovers, only then, that healthcare requires funding they have never accumulated.

The Case for a Post Retirement Medical Fund

By a Post Retirement Medical Fund, I mean a dedicated arrangement through which resources are accumulated during working life to help finance eligible healthcare expenses, medical-cover premiums, or a combination of both after retirement.

Its precise legal structure, contribution arrangements and permitted benefits would depend on the country’s regulatory framework.

The design principle is straightforward:

Prepare for retirement income and retirement healthcare together, while giving each an explicit funding purpose.

A pension provides resources for everyday living. A properly designed Post Retirement Medical Fund can help reduce the extent to which healthcare expenses erode those resources.

This creates a practical connection between saving for retirement and protecting the life those savings are intended to support.

However, a dedicated account does not make healthcare affordable by itself. An individual balance can still be exhausted by prolonged or expensive treatment.

A credible design must therefore consider how accumulated resources connect with public health entitlements, suitable insurance or other risk-pooling arrangements, and accessible healthcare services.

Savings build resources. Risk pooling helps spread costs that an individual may be unable to carry alone. Both deserve attention.

What a Credible Design Should Address

Start contributions early and make the trade-offs visible. Members need time to accumulate resources. Employers could consider contributing alongside employees, subject to affordability and the applicable framework. Any proposal must show its effect on take-home pay and pension accumulation. Simply redirecting existing pension contributions may weaken future income security.

Define the benefits clearly. Members should understand whether the fund finances premiums, approved medical expenses, or both. They should also understand eligibility, treatment of dependants, access conditions, charges and what happens to unused balances.

Plan for the household. A member’s retirement finances may be affected by a spouse’s healthcare needs as well as their own. Design discussions should make those needs visible and explain the cost of any dependant benefits.

Test long-term sustainability. Contribution levels and benefit expectations should be assessed against plausible healthcare costs, investment outcomes, longevity and administrative expenses. Projections should expose uncertainty rather than create an impression of guaranteed sufficiency.

Provide for employment changes and interrupted contributions. Members change employers, become self-employed or experience periods without regular income. Preservation and portability should be considered from the outset, wherever the framework permits them.

Build governance around access and value. Clear oversight, transparent fees, appropriate investment arrangements, understandable claims processes and effective complaints handling all matter. Members need to know both what has accumulated and how those resources can support them.

A fund balance is only part of the outcome. The member must be able to use the arrangement when care is needed.

A Proposition for Africa Must Include People with Limited Means

Africa’s employment patterns, healthcare systems and household incomes vary considerably. A single contribution model will not serve every market or member.

For a worker struggling to meet immediate needs, another deduction may be difficult to sustain. For someone earning irregularly, a fixed monthly contribution may be impractical.

Design options could therefore include flexible contributions, employer support and, where public policy and resources allow, targeted support for those with limited means.

Public healthcare remains fundamental. A Post Retirement Medical Fund should complement broader health protection and help address identifiable gaps.

Its success should be judged partly by who can participate meaningfully.

An arrangement available only to those already well protected would leave the central inclusion challenge unresolved.

Family Support Should Not Carry the Entire Burden

“My children will help” expresses a bond that deserves respect.

But those children may also be raising families, servicing debt and trying to build their own retirement savings.

When a parent’s medical needs require repeated emergency contributions, the consequences can extend across generations. One household postpones saving. Another borrows. A family member reduces paid work to provide care.

A well-designed Post Retirement Medical Fund can help reduce some of this financial pressure, although it cannot remove every cost or care responsibility.

Preparing for healthcare in one generation can help preserve the next generation’s capacity to prepare for retirement.

The Questions Trustees and Employers Should Now Ask

For existing schemes, I propose a structured assessment of post-retirement healthcare provision. For new schemes, I propose that this assessment form part of the initial design.

That assessment should establish:

1. What healthcare protection members can reasonably expect after employment ends.

2. Which costs and access gaps remain.

3. Whether a Post Retirement Medical Fund would materially improve protection.

4. How it could be financed without creating unaffordable contributions or undermining pension adequacy.

5. How it would interact with public provision, insurance and existing employer arrangements.

6. What evidence would demonstrate better outcomes for members.

The response may differ between schemes. The question deserves an explicit answer in each.

Through MOCA - the Member Outcomes Compliance Audit - I encourage institutions to examine the member’s experience alongside the completion of institutional processes.

Applied here, that perspective asks whether members understand their arrangements, can access the promised support and receive help when something goes wrong. These questions should be pursued within institutional mandates and with appropriate protection of sensitive information.

The measure of success is the protection the arrangement delivers in practice.

Healthcare and the Possibility of Preferment

In From Retirement to Preferment, I invite readers to imagine a purposeful life beyond formal employment. That life might involve mentoring, community service, family, enterprise or a long-postponed calling.

Accessible healthcare helps preserve the freedom to pursue those possibilities. Older people can continue to live meaningful, active lives while managing health conditions; WHO explicitly recognises that healthy ageing does not require being free of disease.

Our retirement arrangements should support that possibility with practical preparation.

A Post Retirement Medical Fund deserves serious consideration wherever we design, review or strengthen pension schemes in Africa.

It will require careful funding, sound governance and coordination with the wider health system. Its value will depend on the quality of that design. But leaving healthcare as an unexamined assumption carries consequences too.

At the next trustee meeting, scheme-design workshop or employer benefits review, I would place this question on the agenda:

“How will our members finance healthcare after retirement - and what role should a Post Retirement Medical Fund play in that answer?”

And for every person still in employment:

When your salary stops, what arrangements will help keep essential healthcare within reach?

This is Conversation 5 of my series, Rethinking Retirement in Africa: 10 Conversations the Pension Industry Must Have.