Pension fund trustees and administrators are in talks with the government over partnership in financing construction of affordable housing units across the country.
Players overseeing investments of Sh1.32 trillion said they will engage with housing and urban planning permanent secretary Charles Hinga for possible participation in the mass housing initiative.
The development follows recent Retirement Benefits Authority (RBA) regulations review that unlocks upto 40 percent of each pensioner’s savings for use in purchasing residential homes or building the same
“Participants will also review the pre and post Covid-19 investments opportunities and engage with PS Charles Hinga on the government’s affordable housing programme and the new RBA mortgage regulations,” they said yesterday.
A a two-day seminar convened by retirement funds administrator Zamara Group heard that there was a need to restore trustee powers in making decisions that affect individual schemes.
Zamara Group chief executive Sundeep Raichura also expressed concern over rising number of governance initiatives from RBA saying they risked hurting trustees’ powers in management of individual pension schemes.
“There is a clear link between good governance and good scheme performance, but my biggest worry is that the guidelines could become a tick-box exercise leaving insufficient room for effective decision-making by trustees” said Mr Raichura.
He vouched for trustees’ independence in running pension schemes so as to ensure higher returns.
RBA supervision manager Caroline Wanjala defending the new RBA guidelines on good governance, said they were aimed at safeguarding savings currently standing at Sh1.32 trillion as at June 2020.
Mr Raichura who also heads the Kenya Pension Funds Investment Consortium (Kepfic) welcomed ongoing talks that create an avenue for pension schemes to chip in funds into a pool that will be used for funding public projects.
“Pension funds must play their rightful role in developing the country.
With their two-decade phenomenal growth from Sh80 billion to Sh1.3 trillion funds under management, correct incentives and regulatory interventions could see pension schemes play a significant development role,” he said.
“The pensions schemes consortium, Kenya pension Funds in our country, particularly in financing the country’s developmental needs, which include infrastructure and provide much needed financing to industry and businesses through capital markets and private equity financing,” said Mr Raichura.
Kepfic, is to become a special vehicle that foreign development partners among them the world bank and others will use to tap into pension funds where Sh25 billion is earmarked for injection in local developments within the next five years.