Peter Rotich: Managing a closed pension scheme requires a different strategy
The TelPosta Pension Scheme, a closed defined-benefit fund, is navigating the challenges of managing assets without new contributions while supporting over 7,000 pensioners. Administrator Peter Rotich highlights the need for investment diversification and prudent governance to ensure long-term sustainability.
Why it matters
This provides insight into the financial management of legacy pension schemes, which face unique risks as their membership ages and funding sources dry up.
TelPosta Pension Scheme Administrator and Trust Secretary Peter Rotich /HANDOUT RUNNING a pension scheme without receiving a single shilling in fresh contributions presents a unique challenge for trustees, particularly when the fund is ageing and pays billions of shillings in benefits every year.
For TelPosta Pension Scheme, which has been a closed defined-benefit scheme since December 2007, the task is to ensure its existing assets continue generating enough income to meet pension obligations until the last eligible beneficiary receives their benefits.
The scheme has assets worth about Sh14 billion and pays approximately Sh1 billion annually to more than 7,000 pensioners . It has also been grappling with a heavily property-based investment portfolio, legacy land disputes and a 15-year legal battle over pension benefit calculations.
Get smarter about the news
Sign up free for a feed built around what you actually care about, Dive Deeper research on any story, and the full text of every article.
Create free accountAlready have an account? Sign in