Court fight leaves staff pension at high risk
What you need to know:
- Justice Isaac Lenaola restrained the pensions industry regulator from proceeding to deregister CPF Financial Services or inspecting Laptrust, which controls assets valued at Sh24 billion.
- Two years ago, the authority launched investigations to determine whether Laptrust Administration Services Ltd was operating as a private entity or as a government agency subject to ministerial direction.
- The MD had earlier said that there was no single private shareholding in the Laptrust Group and that issues between his company and the regulator had been under discussion for a long time.
County workers’ dues worth billions of shillings are at risk following a move by the Retirement Benefits Authority to withdraw their pension fund’s licence.
This comes even as the County Pension Fund Financial Services, formerly the Local Authorities Pensions Trust Administration Services Limited, said it would fight to remain in business.
CPF breathed a sigh of relief last Friday after the High Court barred the authority from revoking the permit.
INDUSTRY REGULATOR
Justice Isaac Lenaola restrained the pensions industry regulator from proceeding to deregister CPF Financial Services or inspecting Laptrust, which controls assets valued at Sh24 billion.
He also restrained the regulator from carrying out a forensic audit on the fund pending determination of a suit filed by CPF Financial Services and Laptrust.
The authority on September 4 revoked the licence of CPF Financial Services, which is one of the largest administrators of pension schemes in Kenya.
The firm — the brainchild of Laptrust, which controls pensions’ contributions and savings for former workers of the defunct local government authorities and the current employees of the new county governments — contested the decision by the industry regulator.
“CPF Financial Services Ltd does not agree with the decision that has been made by RBA and will seek to appeal and take legal action over the adverse reports and propaganda propagated by certain industry players who are our competitors for their own selfish reasons,” Mr Hosea Kili, group managing director, said in a statement.
RELEVANT FACTORS
CPF told the High Court that the authority failed to consider relevant factors in arriving at the decision to revoke its licence as a pensions’ administrator.
It sought justice under a certificate of urgency, claiming the Retirement Benefits Authority ordered its closure and directed it to surrender the certificate of registration for destruction.
Speaking by phone, the authority’s managing director, Mr Edward Odundo, maintained that the regulator will present its facts and wait for the outcome of the judicial process.
Two years ago, the authority launched investigations to determine whether Laptrust Administration Services Ltd was operating as a private entity or as a government agency subject to ministerial direction.
BOARD OF TRUSTEES 'ERRED'
In a legal notice, the Attorney-General said the board of trustees of the state-controlled scheme had erred in creating a separate company.
The authority had indicated that the County Pension Fund failed to resolve conflict of interest arising from the operation of the two entities, namely, CPF and Laptrust, by the same management.
“We wish to clarify that CPF Financial Services Ltd has not in any way violated the law in regard to the management of retirement benefits for its client schemes and members.
“The decision by the trustees of the Local Authorities Pensions Trust to incorporate the company was a step towards separation of in-house scheme administration in line with global best practice,” Mr Kili said.
SEPARATE COMPANY
The MD had earlier said that there was no single private shareholding in the Laptrust Group and that issues between his company and the regulator had been under discussion for a long time.
Mr Kili blamed the woes on external forces intent on influencing “the minds and views of the public on the pension scheme for county government employees to their favour.”
The case will be heard on September 29.
