Kenya Railways Staff Retirement Benefits Scheme, established in 2006 to safeguard the interests of over 10,000 pensioners, has taken a major step over the past three years and its now remitting KSh70 million monthly to its members promptly.
This change in fortunes has been occasioned by the ongoing reforms and prudent management of the scheme being undertaken by Corporate & Pension Trust Services Limited, a wholly owned subsidiary of Alexander Forbes Financial Services East Africa Ltd, which was appointed by Kenya Railways Corporation.
While addressing over 1,000 members during the scheme’s 5th Annual General Meeting at the Railways Club today, Corporate & Pension Trust Services Managing Director Anthony Kilavi underscored the need to regularise timely payment of pensions to members to make their lives more comfortable.
“The improvement of this scheme has been an uphill task which we have achieved despite numerous challenges ranging from unpaid arrears to members, uncollected debts and frequent court cases and injunctions as well as low monthly rental collections,” he added. He said the scheme has 99% property investment with properties situated in various parts of Nairobi and Mombasa and this continues to pose a significant liquidity challenge to the scheme.
The Corporate Pension boss said Retirement Benefits Authority requires that all pension schemes maintain only 30% of the fund in form of property and they were working around the clock to try to comply with this regulation.
Mr Kilavi argued that despite a myriad of challenges, the scheme had launched an aggressive debt collection campaign which has resulted in improved monthly rental collection from Ksh26 million to Ksh46 million. The scheme has also increased monthly pension for pensioners and dependents in line with the guaranteed annual increases and also given a one-off pension increase to the members.
He said the scheme plans to improve the liquidity ratio by fast-tracking the disposal of its two properties to improve the cash flow position and pay off outstanding members’ benefits which have not been settled for a long period. “The disposal process however, faces many challenges such as absence of titles, litigation by tenants, encroachment by private developers and land grabbers as well as lengthy process at the Ministry of land. But this has been our learning process and future disposals will be much faster and smoother”, he added.
The CEO said a five-year strategic plan aimed at enhancing financial sustainability and development of the scheme has been formulated and received the requisite approvals of the sponsor.
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