Thursday, 8 March 2012

Raila's Sister and the Kenya Railways Staff Retirement Benefits Scheme

Welcome to the Kenya Railway's Pensioners blog. Every thought is valued and each expression respected.

There comes a time when People act in a mob like manner and take decisions by means of what they feel rather than on the basis of Facts. This situation visited the Kenya Railways Staff Retirement Benefits Scheme in 2008  and again it happened in October 2011to the great disadvantage of all stake holders. It begun with the Sponsor's appointment of new Trustees just at a time when the founder Members of the Board of Trustees had developed a strategic plan and were at a point of implimenting the policy. A new set of Trustees were then appointed including the imediate former Chair person Ms Beryl L. Odinga.

Unfortunately, her family name got in the way of every action and perception of her administration to the extent that very few people could see anything else other than that she was the Prime Minister's sister. In few occations this opened doors that would generally not open to a struggling pension Scheme. But most of all it attracted all those who wanted to take a pot shot at the Prime Minister but did not have the courage or basis for the attack. Thus when she eventually left the service of the Scheme in a huff with alot of attack on her admininstration by Stake holders in the industry as well as the press I wonder whether any one has spent time to ask themselves the question. "If any rational being was given the same circumstances that operated at the Scheme what would they do?" Personal flaws aside what really went wrong? what alternative means need to be taken?

Here are some of the circumstances:-

  1. The Scheme was established in 2006 by an insolvent Sponsor (Kenya Railways Corporation) whose only asset to transfer was property valued at Kshs 12.4 Billion no money was transferred with those assets. No follow up funds would be recieved except relactant payment of rent.
  2. The sponsor was at the same time terminating the services of all its staff whom at the time of the Concession were 8500 permanent and 7500 casual employes. Of this group 3600 were being absorbed by Rift Valley Railways and KRC would retain less than 200 on new contracts of employment. Along with this group was another 7500 pensioners who were already a nut shell a large number of angry and agrieved group awaiting to be settled.
  3. The properties transferred had 14 out of 23 titles availiable yet they needed to be trasferred from East African Railways the preceding organisation to Kenya Railways. Other titles were yet to be surveyed  or were charged with Banks prior to transfer. The property was also encumberred by occupants some with legal disputes with the Kenya Railways on their former terms of employment. Others still developing a squarter tendancy assisted by local ward leadership who consider them their consituents.
  4. On month one the Scheme was required to pay Kshs28 million in pensions. this amount has risen to Kshs 55 million as at December 2011. there was an arrears of pensions increase dating back to 1997 which was due at an increase of 3% per annum.
  5. The properties had liabilities owed to the City in form of Rates and Land rent owed to Mininstry of Lands amounting to over 200 million.
Among other minor challenges, it is amazing that the Scheme even took off. The only item that sustained it has been good will from the various stake holders as the Trustees grapled with the payment of pensions as they rationalised the assets to a more economically viable state. As at December 2011,
  1.  the scheme has paid over Kshs 2 billion in pensions  
  2. Transferred all the assets to the Scheme except 2 titles
  3. The assets is now worth over Kshs25 billion
  4. Established Systems that manage the fund and respond to challenges on its governance and other threats
  5. Is a stable going concern if the liquidity position is improved.
Against these actions is the the report of examination by the Regulator which highlight the human element where self preservation took centre stage. The next course of action would be to implement the recommendations. I hope that whoever does this should learn from the past situation and ask the Question is a Pension Scheme a Public Entity or Not because thats where alot of the current concerns are emanating. What latitude do Trustees have and of course what is the security of tenure for the Service providers that provide advise?

So I leave it for you to Judge but remember that the main concern is about the Pensioners many of whom are old and depend on the Kshs 2000 to purchase medicine. they cannot afford to wait for experiments.

Tuesday, 16 August 2011

Where KR pensions started, when will group C be pensionable

Welcome to the Kenya Railway's Pensioners blog. Every thought is valued and each expression respected.

Hi everybody,  did you know that the Railways pensions is among the oldest scheme's in the country? If you count the various processes and stages it has undergone. Very early in the days when most of the Railway staff  were either civil servants or members of the Imperial East Africa Company the offers were categoried into three bands unfortunately based on contracts that were based on their origin and their races. the British staff had a pension provided for by the Government and their terms of service were outlined in the staff regulations which date back to 1924 a copy of this document modified in 1936, 1945, 1968, 1977 and finally 1988 are availiable at the KRSRBS office. In the 1988 version a section J was devoted to their terms of service. Most of these officers were in management positions and their terms of service was permanent and pensionable. though they were also eligible to a superannuation fund to support their spouses.

A second category of staff mainly originated from India and other colonies of the then Great Britain, most of these staff were Asians. These staff were on contract employments that were annual or bi annual. Their skills were specialised and thus were either technicians, crafts men or artisans. Their terms of employment required them to be provided a provident fund that was contributory others joined the super annuation fund but they initially were not eligible for pensions. The key distinction of their terms were that their provident fund was targeted at their widows and dependants to receive support in the event of thier demise even after retirement from service.

The third category were kenyans who were considered as casual labour working on jobs that required minimal skill but really dificult and risky tasks. Accordingly, they were not entitled to a pension. some one once commented when this was requested that they had the kinship system to fall back to and that they worked from home which is a great mis conception since those who took up work in the earlier years barely had any other option.

The above categorisation existed until independence when the africanization program re structured the processes and the three categories were still retained though the division was now based on skills and not origin. as at 2006 when the Kenya Railways was concessioned. The pension component had been opened up to include the technicians craftsmen and artisans in all vocations. However for the female employees this benefit came late in the day, infact some were converted as late as 2005. The provision was made for the this category when the impact of retrenchment showed and some ladies were nearly financially embarrassed during a retrenchment exer5cise conducted between 1995 and 2004.

The third category of the semi skilled staff in the Group C remained in the non pensionable catagory. Though their numbers were large, it was at the establishment of the KRSRBS that a debate to include them began. this has yet to be finalised. However, the impact pension would have on their lives would have been really positive.

I hope this will be addressed before all of them  are retired on the old terms. Is there any one in this category following the matter other than Opondo who used to be in the CSTE department?

With the introduction of the Concession and the building of the Standard Gauge Railway (SGR) line from Mombasa to Nairobi and beyond, new methods of managing the retirement benefits of the members continue to be incorporated. Generally, the benefits are now regulated under the Retirement Benefits Act and since that point it has become standard practice to adopt a a contributory scheme that is managed by other party than the employer. the Rift Valley Railways settled on Alexander Forbes Financial Services to manage its pensions. Kenya Railways also followed suit by making  Alexander Forbes the Trustees of the KRSRBS. As for the new KRC staff their terms were given to other insurance firms either Old Mutual or Britam. i do not know the current status of the pension plan. what i wonder is for the new group who have been hired by the Chinese firm to build the SGR what sort of scheme is in place for them.

does anyone have the update as at 2015?

Wednesday, 10 August 2011

Welcome to the friends of Kenya Railways Staff Retirement Benefits Scheme blog site

Mr Thomas Kithingi Founding Chair of the Board of Trustees recieving a farewell gift from the incoming Chairperson of the Board of Trustees Ms Beryl L. Odinga at the Scheme Board Room on December 11, 2008. During the handing over Ceremony.

A picture of the old and new Trustees of the Scheme at the handing over ceremony starting from the Back row on the left to right Eng. Peter Imbisi, Mr. David Masika, Mathews Tuikong, Mr. James Murigu and Mr. Puis Mutay, those sitted from left to Right Dr. Mtana Lewa, Mr. Thomas Kithinji, Ms Beryl Odinga, Mr. Charles Muthee and Mr. John Chumo.

What a day it was, the old team handing over the Scheme after 8 years of working to establish the fund, providing for the assets, registering the Scheme and developing the Strategic plan that ensures that systems and structures were in place and the short term and long term needs of the scheme are prioritised for the posterity. The new team working towards taking the scheme to greater heights and improving the cashflow.