>

Pension scheme plans sale of county assets to recover debt

3 months ago 59
SHARE THIS POST

Counties
Friday July 01 2022

pension

Local Authorities Pension Trust Defined Benefits Scheme meeting. FILE PHOTO | NMG

County pension fund administrator, CPF Financial Services, is considering selling assets of some devolved units among them Nairobi County to recover a huge debt in form of unremitted members’ contributions.

CPF says the local authorities pension trust (Laptrust) scheme with almost 8,000 members is grappling with outstanding unremitted contributions by the counties, leading to lower returns to pensioners from invested assets.

The administrator has engaged the Retirement Benefits Authority to recover the defaulted remittances from the top debtor, Nairobi City County.

It has managed to negotiate the collection of debt by Nairobi Water and Sewerage Company which also had high arrears.

“Audit of assets and liabilities of the former municipalities and county councils was completed and the debt owed to the scheme was captured. Considerations are being made to explore ways of liquidating the debt,” said Laptrust DB scheme chairperson Winfred Mbai.

“The Board has engaged inter-governmental agencies on possible recovery of the debt at source. This will be the only sure way to ensure that the monies are promptly recovered and invested for the members’ benefit.”

Most of the unremitted contributions are historical even before the establishment of devolved units. This has forced the scheme to collect current contributions in full from most of the sponsors to control a further buildup of debt.

CPF Financial Services’ assets under management were Sh68.24 billion as of December 2021, under its four managed schemes with over 87,700 members.

The schemes managed by CPF include Laptrust, County Pension Fund (CPF), CPF Individual Pension Scheme and the Salih, a segregated fund within CPF.

The Laptrust Defined Benefits scheme fund value, a closed scheme meaning it does not register new members, grew by 1.6 percent to Sh31.8 billion, from Sh31.3 billion the previous year.

Laptrust scheme’s pensioners and beneficiaries increased to 7,894 from 7,723, however, active members stood at 17,109 down from 18,014.

The country’s retirement benefits assets under management increased by 4.68 percent to Sh1.55 trillion in December 2021 from Sh1.48 trillion in June 2021, with 45.7 percent invested in government securities.

[email protected]

Source : Businessdaily Africa

SHARE THIS POST