I am now Jobless: What of my Benefits?

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There will come a time in your life when you will leave work, either through retirement, resignation, or retrenchment. But before the inevitable day comes, you will need to prepare yourself for a new phase in life, both psychologically and financially because being jobless means having to make or do with no regular income.

There will come a time in your life when you will leave work, either through retirement, resignation, or retrenchment. But before the inevitable day comes, you will need to prepare yourself for a new phase in life, both psychologically and financially because being jobless means having to make or do with no regular income.

 

And now you are ready to leave, but what about the benefits owed to you by your employer? Will you ever get that money you have worked for over many years, and rightfully deserve after leaving the workplace? And if you will get it, how much does your employer owe you? And when will you receive that check?

Millions of retirees as well as other former workers leave their jobs after faithful service, only to go home and live a pauper’s life while money that is rightfully owed them lies idle somewhere with their employer, or in a pension scheme awaiting collection.

According to Caroline Khamati, an economic and productivity researcher with the Central Organisation of Trade Unions, COTU in Kenya, millions of former employees, when they get their terminal benefits, walk away with a package that is much less than their worth. “The money that is given to a worker is supposed to reflect a calculation based on the number of days they worked in a particular place.” 

Khamati notes that your employer has no control over your pension since it is protected by an act of parliament. For example in Kenya, that money is accessed after the age of 55 when one is officially retired. However, gratuity or what is known as terminal benefits are supposed to be given in monetary form within a week of leaving the work place. She notes that most former employees will leave the work place emotionally charged, without following up on their money, while some employers may summarily dismiss a person on flimsy grounds to avoid paying a lot of money in form of gratuity.

Indeed, due to ignorance, many workers have been short-changed in the calculation of their terminal benefits.

"At COTU, we have had so many of these cases, where someone was given an amount of money, say even a million [Kenya] shillings after working for many decades, only for them to realize that the formula used to calculate their benefits was deeply flawed." 

It will be wise to consider the terms of service that you had with your employer, and how long you worked in that place. "Benefits and gratuities are calculated using the number of days that you worked, along with other benefits that you and your employer had agreed on at your time of employment.

But even after receiving huge amounts of money, it is key for the person to seek professional advise from investment experts so as to put their money in useful investments.

According to a research done by the local retirement benefits authority, if you are retrenched you will still receive your terminal benefits, which are paid to you by your employer.

Surveys carried out by the Retirement Benefits Authority in Kenya show that many people who are paid their benefits when they change jobs hardly invest in serious enterprises, utilizing the cash on consumption expenditures such as household goods, and other needs that always arise in day to day living.

Statistics also show that because of accessing benefits every time they change jobs, many workers earn very low benefits at retirement despite having saved for as many as over 30 years. Most ordinary Kenyans are not knowledgeable about investments and are unlikely to be as good at investment. The reality on the ground is that up to ninety percent of start-up small businesses that are put up by these former employees wind up within two years.

Many parameters are used when down-sizing a company's workers such as age where older workers are usually the first to go. Another reason could be due to department mergers where workers whose jobs become obsolete and they cannot multitask may have to leave. The company may also look into the employees' records, where issues of discipline and other character defects could cost some people their jobs. 

Even though preparation for lay off enables one to cope with the loss of regular work, most of the employees, even those who are already prepared, will experience a significant sense of emotional loss, and may doubt their worth once they find themselves suddenly unemployed.

Embarrassment also follows their newfound stage in life especially when they have to face their relatives after being stripped off their previous status.

Depression and stress that results from the thought of being jobless can cause suicidal tendencies yet many companies do not take the initiative to prepare their employees for the inevitable, preferring instead to let them go and deal with their new status alone. 

And because many companies may not prepare their workers for the possibility of getting retrenched, many workers' sense of self-worth and the perceived social standing that comes with a job title find themselves left with nothing to fall back on, especially for those who have spent many years in the same job, and those who allow their jobs to define their personal lives.

We have heard of incidents where employees collapsed on hearing that they will no longer have a place to go to work every day while others have emptied all their pensions and benefits at the pub.

Others proceed to marry an extra spouse, when their benefits are paid and now cash is in plenty! So when the huge cash benefits are finally paid, what should the now un-employed person do? Most companies and organizations locally and around the world never prepare their employees for life beyond work.

"Most companies will only give the worker his benefits and have nothing to do with them beyond that. This is unfortunate because this person has been serving the company but is now regarded of no use. There is need for the worker to be psychologically prepared, as well as get training on how to use the money which mostly comes in lumpsum."

But perhaps the most urgent case is the issue of lack of funds when one finds him or herself suddenly jobless. Few workers, if any, cater for the eventuality of the loss of income due to retrenchment. And coupled with short and long term financial commitments, the now jobless person could find themselves cumbered with a load of severe emotional impact.

There are more than a good number of conmen out there waiting to help the retrenchee spend their money. During such a time when one has too much money at their disposal, advisors who come in the form of friends and even relatives are usually keen to help the hapless guy spend their benefits. Beware of various business ideas that soon come begging your attention and input. Then there are others who will pose as potential money doublers.

These benefits could be the last money between a retrenchee and the rest of their life; therefore, they cannot afford to spend this money on expenses or luxuries before they plan for the rest of their lives. And how they spend this last batch of money could determine how much longer this person will live.

But for those prepared to face a future, there are options beyond the current situation, and getting jobless could come as a blessing in disguise. One such option is to start a business.

Moving from a regular pay to self-employment is a change that takes planning and preparation. For those thinking to go it alone, ask yourself if you have the entrepreneurial mindset needed for being your own boss.  Business needs patience, persistence, and discipline especially when it comes to separating between the money that is income and the profits, and how to plough back the profits into expansion. For a person who was more used to getting pay at the end of the month, money may become a temptation when it is always around. A number of retrenchees, mostly those who are in younger ages, may prefer to further their studies in order to gain and upgrade specialized skills in preparation for employment elsewhere. A number of others will go looking for the ever diminishing job offers after they have left a company. When a company invests in the welfare of its employees, they perform even better because they know that their personal needs have been taken care of.

Mercy Gakii is a media practitioner, HR professional and writes on Workplace issues. She comments on the career markets, business, development and general feature articles. She can be reached on email: This email address is being protected from spambots. You need JavaScript enabled to view it.

 

 

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