RBA orders audit of railways pension scheme : The Standard

Retirement Benefits Authority (RBA) has contracted an audit firm to scrutinise the dealings of the troubled pension scheme for former workers of Kenya Railways Corporation. The move follows claims of mismanagement of the scheme’s assets, including reckless disposal of property. Pensioners under the Sh30 billion worth scheme have not been paid their retirement dues for several months, with the administrator citing lack of cash. Audit firm Ernst Young’s findings will be presented to the RBA board of directors for consideration before any action is recommended.

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“We have received many allegations which triggered the inspection of the scheme,” said Mutuku Nzomo, the chief executive of RBA. At the heart of the dispute is whether the scheme has been prudently managed considering the prime assets it owns across the country yet pensioners are living in poverty. Many of the retirees are entitled to just about Sh2,000 a month, a relatively small amount, as most of the workers were serving in lowly-paying jobs in the railway service. Nzomo added that the problem of failing to routinely pay up the monthly dues on time could be because the sale of assets, including land and houses, to realise cash is a long process. He could, however, not confirm whether the supposed disposal of assets below market prices was among the focus of the audit.

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Rental income from the various properties is reported to be insufficient to meet the retirees’ monthly pay, informing the decision to continuously sell the properties to plug the deficit. Recently, the pension scheme placed some assets on auction but this was bitterly resisted, with representatives of the retirees planning a protest march to the offices of the corporate trustee. The auction notice was cancelled at the last minute.

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Retirement Benefits AuthorityRBA