PENSION FUND TRUSTEES URGED TO EMBRACE GOOD GOVERNANCE PRACTICES AS SECTOR EXPANDS

Pension fund trustees and administrators have been urged to adopt good governance practices in order to ensure effective service delivery, viability and sustainability of the schemes which are under them.  

Speaking at the official opening of a two-day pension trustees seminar organized by Zamara, Caroline Wanjala,  the manager of supervision at the Retirement Benefits Authority ( RBA)  appealed to  pension fund trustees to adopt the regulators’  guidelines on good governance , besides  treating customers fairly.

“The guidelines are intended to ensure that pension schemes are well anchored on robust governance principles and optimal investment strategies to ensure continued growth of the industry” said Ms. Wanjala.

Zamara Group chief executive officer, Sundeep Raichura however expressed concern at the volume of current governance initiatives from the regulator and the risk of overwhelmed trustees reverting to box-ticking rather than considered responses.

“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 and leave insufficient room for effective decision-making by trustees” said Mr. Raichura.  “Good governance is not about ticking boxes.  In the context of a pension fund, it is about achieving good outcomes for members of pension funds,” he added. Mr. Raichura urged pension funds to play their rightful role in developing the country. “The pensions industry in Kenya has witnessed phenomenal growth in the last twenty  years with the total pension assets increasing from KShs. 80 billion  in 2000 to over KShs. 1.3 trillion  currently. With the correct incentives and regulatory interventions, the pensions’ sector in Kenya can play a significant role in our country, particularly in financing our  developmental needs, which include infrastructure and provide much needed financing to industry and businesses through capital markets and private equity financing,” he further  said.