RBA unveils tough rules for pension managers

Trustees in Kenya’s pension market will be required to have training in financial management and corporate governance as regulators races to grow returns on retirement savings.

Trustees are officials appointed by the employer and workers to manage the assets of their respective scheme by ensuring pension funds are invested in assets that create above average wealth for members.

But the challenge across the world has been that those appointed to be trustees, especially by employees, do not have invesment skills and this restricts their ability to monitor fund managers and participate fully in schemes’ operations.

“As people entrusted with the management of scheme assets, trustees have a huge responsibility of ensuraing member’s scheme funds are prudently invested,” said Manyara M’Igweta, the chairman of Retirement Benefits Authority( RBA).

The move is emerging amid debate that fund managers have a lot of leeway on the way they manage pension assets and the fact that draw in outsized fees relative to the returns on workers retirement savings.

Training means they will have skills be more involved in the running of the schemes and that they fully understand the consequences of their failure to act on management decisions,” said Manyara M’Igweta, chairman of the Retirement Benefits Authority (RBA) .

The certification process will be through a five day intensive training at the College of Insurance under a program developed by the Humber University of Canada. Trustees will then be examined and those who pass will be certified.

The training modules include; retirement scheme fundamentals for trustees, the law on retirement schemes, role of trustees in scheme governance, funding and investing in schemes, contracts and source, and issues relating to administration and oversight.

“Trustees manage the wealth of pensioners and it’s only important that they get trained to enable them make better investment decisions,” said Justus Mutiga, the General Manager of Pensions and Life Insurance at the Insurance Company of East Africa.

Although pension assets grew by 700 per cent in the last ten years, certification is expected to result in faster growth as trustees will now have skills to invest pension funds--earnings retirees larger savings to match their living standards upon quiting employment.

RBA statistics indicate that pension assets grew from Sh50 billion to Sh451 billion from year 2000 to 2010.
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