The staff pension scheme is expected to benefit from a multi-billion investment programme that will see the development of the scheme’s 2-acre plot located in Nairobi’s posh Kilimani area into a Grade A premium commercial building, mainly planned to provide office space.
Speaking at the University, Thursday April 24, 2014, Ambassador Steven Loyatum, Chairman, Board of Trustees, JKUAT Staff Retirement Benefits Scheme (JKUAT SRBS) disclosed the project will be undertaken in two phases, with Shs. 1.7 billion Phase 1 construction works expected to commence in May, 2014.
Presenting his 2013 JKUAT SRBS, Amb. Loyatum, said the first phase that will be implemented in two years will include the construction of three basements, a lower ground and tower one of 14 regular floors. He further told the pension members that up to 70% of the current University Pensions Funds were invested in bonds and equities which he said, were vulnerable to prevailing local erratic interests rates, “This has a profound effect on total performance of the scheme,” he observed.
The development of the plot according to Amb. Loyatum, should be understood as a strategic investment undertaken by the trustees to cushion the University Pensions Fund against a volatile market.
Commenting on the growth of the JKUAT SRBS since its registration in 2002 under the Retirement Benefits Authority, Amb. Loyatum noted, the scheme had made remarkable progress in terms of net asset value growth from Kshs. 224 million in 2002, to Kshs. 2.104 and 2.645 billion in 2012 and 2013, respectively.
“To this end, the rate of return declared by the Board of Trustees on member balances outperformed inflation in 2013 which stood at 7.2 %. The final interest rate applicable on member balances in 2013 is 11%, an increase of 8% from the previous year.”
Members’ contributions rose from Shs. 2.65milioon in 2012 to Shs. 3.39 million in 2013, while net return on investments rose marginally from Shs. 2.10 million to2.64 million in the same period. The scheme’s investment grew from Shs. 1.85 million in 2012 to Shs. 2.57 million the following year, with Treasury bonds and Corporate bonds accounting for the lion’s share in earnings.
Speaking on behalf of the Vice Chancellor during the ceremony, Prof. Romanus Odhiambo commended the funds trustees for successfully steering the scheme. Prof. Odhiambo also a member of the scheme, advised fellow contributors to enhance their future individual pensions through the voluntary contributions scheme which allowed members to contribute more than the statutory 30% requirement.