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Pension Fund Management

The most flexible market-linked investment which OMAM (K) offers is a segregated portfolio uniquely managed on behalf of the client. This is known as a Managed Fund. The assets are registered in the name of the client and held by the client’s custodian.

A portfolio manager is allocated to the Fund who is responsible for the management of the fund. The portfolio manager has to invest the mandated requirements received from the client and adhere to the other guidelines and controls set by our investment decision-making process.

Kenya's Pension Fund Industry

  • The pension schemes sector in Kenya amounts to approximately KShs 200 billion, or the equivalent of 23% of Gross Domestic Product (GDP).
  • Savings for retirement in Kenya are currently operated by:
    • Statutory contributions under National Social Security Fund (“NSSF”)
    • Sponsor-led schemes
    • Individual Retirement Benefit Schemes
  • Formal retirement benefit sector covers approximately 11% of the labour force.
  • The Government of Kenya has recognised the importance of the retirement funds industry in boosting economic growth and in accelerating domestic savings which currently stands at a rate of 13%.
  • The legal framework of the industry is governed by the Retirement Benefits Act 1997.
  • The Retirement Benefits Authority is the regulator for the industry.
  • The RBA objectives include raising of retirement coverage and to boost domestic savings to 25%.

In 1997, The Government of Kenya embarked on an overhaul of the retirement funds industry, previously plagued with the mismanagement and misappropriation of pension scheme assets. The Retirement Benefits Act was introduced in 1997 aimed specifically at regulating a market which had heretofore lacked a harmonised legal framework. Under the Act, a Retirement Benefits Authority was formed with the following specific objectives:

  • To regulate and supervise the establishment and management of retirement benefit schemes.
  • To protect the interest of members and sponsors of retirement benefits schemes.
  • To promote the development of the retirement benefit sector.
  • To advise the Minister of Finance on the national policy to be followed with regard to the retirement benefits sector.

Under the Act, registered pension schemes are obliged to appoint:

  • A board of trustees, one third of whom must be elected by the scheme members.
  • Professional managers to manage the scheme assets.
  • A custodian to hold the assets in safe-keeping.

Additionally, schemes are obliged to produce audited accounts on an annual basis. Direct benefit schemes are further obliged to undergo actuarial review every 3 years.

The Retirement Benefit Authority (RBA) has set guideline limits on the amount that can be invested in any particular asset class.

The RBA is currently engaged in an education programme aimed at highlighting the need to save for retirement for the general public. Additionally, it provides trustee training workshops geared at educating trustees on their roles and responsibilities. The RBA has a dedicated website, containing important information on service providers, legislation and general information.

For more information on Pension Fund Management please visit your nearest Old Mutual branch or send us an email.

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