New guidelines to check uncontrolled spending of retirement cash are under formulation to ensure retirees take home better perks.
The Retirement Benefits Authority (RBA) said the guidelines were necessitated by rising expenses by schemes where trustees determined their emoluments among other operational expenses. This ended up hurting the three million workers who have saved Sh1.2 trillion in 1,300 retirement schemes.
“RBA will soon formulate guidelines to determine remuneration for all trustees. We must curtail expenses for the benefit of the savers,” said RBA deputy manager (supervision department) Caroline Wanjala.
Ms Wanjala said at the annual Zamara Fanaka Retirement Fund investments meeting that RBA had also directed trustees and fund managers to actively participate in property acquisition decisions to avert a situation where retiree funds were locked in ‘idle’ land.
“Idle land has no rental yield and RBA has since received complaints from scheme members over how parcels of land were acquired... RBA has issued a circular on processes scheme managers must follow when acquiring properties,” she said.
Recently, Kenya Railways pensioners blocked the sale of prime land in Nairobi alleging undervaluation. In Mombasa, Kenya Ports Authority Pensions Scheme bosses were charged in court with spending pension cash to buy a 100-acre piece of land reportedly at an inflated cost of Sh700 million.
Zamara Fanaka Retirement Fund Board of Trustees chairman Lucy Kambuni said it has resolved to focus on long-term investments saying the bourse had adversely hurt prospects in the past year, when pension schemes lost 30 percent of their paper wealth.
“Our 37,510 members whose savings now stand at Sh28 billion expect optimal returns upon retirement after 30 to 40 years of saving.
Retirement means financial freedom to explore, venture and dream and that means we must take a long-term view of all investments we make to safeguard the saver’s dream,” she said.