A Bill that seeks the establishment of the County Assemblies Pensions Scheme for all members of county assemblies; provides for the establishment of the scheme’s Board of Trustees and provides for the scheme’s management and administration has been tabled in the Senate.
The Bill sponsored by Senate Majority Leader Aaron Cheruiyot proposes to have the scheme offer lump sum payments as provident, periodic payments as pensions and income draw-downs with the proposed scheme transitioning all members of county assemblies into one universal scheme for all the 47 county governments.
Cheruiyot in the bill seeks for the provision for the social security of members of the Scheme by ensuring that the members save in order to cater for their livelihood during their retirement and establishment of a uniform set of rules, regulations and standards for the administration and payment of retirement benefits for members of the Scheme.
“This bill seeks for the establishment of the County Assemblies pensions scheme, provides for the payment of retirement benefits to members of the Scheme when they become due, establish transitional provisions for existing schemes and protect the benefits of the members of the Scheme,” said Cheruiyot.
The Scheme shall be a defined contribution scheme providing social security benefits including periodic payments through the purchase of annuities, a lump sum as a commutation of pension or trivial pension in accordance with the Retirement Benefits Authority Regulations, income drawdown, gratuity and any other benefits approved under this act.
The bill states that membership of the Scheme shall consist of all members of county assemblies and members of staff of county assemblies with all members of the third county assemblies and staff shall, on the date of commencement of this Act be deemed to have joined the Scheme.
The Board of Trustees shall; shall formulate policies relating to the Scheme in accordance with the provisions of the Retirement Benefits Act, Cap.197, collect contributions and income payable to the Fund under this Act and pay out the various benefits to persons entitled to the benefits as provided under the Act.
“The board of trustees shall protect the Fund’s assets and ensure the long-term viability of the Scheme, ensure efficient management of the Scheme, ensure prudent investment of the monies forming part of the Fund, negotiate competitive annuity rates on behalf of members and ensure that the Scheme observes high standards of corporate and business ethics,” says the bill.
The board of trustees of the Counties Assemblies Pensions Scheme shall advise the Cabinet Secretary on any matter relating to the objects and functions of the Board under this Act and perform any other functions assigned to it under this Act if the bill is enacted by the Senate.
According to the bill the board of trustees shall have the power to supervise the assets of the Scheme in such manner as best promotes the purpose for which the Scheme is established, appoint a custodian, fund manager and administrator to carry out their functions as specified in the Retirement Benefits Act, Cap. 197 and determine the provisions to be made for administrative expenses as provided for under section 38 and for reserves of the Fund as provided for under section 39.
The board shall be required to ensure protection, where necessary, of the assets of the Scheme, associate with any other institution so as to further the purpose for which the Scheme is established, receive grants, gifts, donations or endowments and make legitimate disbursements from them and enforce remittance of outstanding Contributions by a sponsor.
“The board of trustees shall invest any monies of the Scheme not immediately required for its purposes, delegate any of its powers and undertake any activity necessary for the fulfilment of any of the functions of the Scheme,” says the bill.
The Board of Trustees shall appoint a custodian of the Scheme who shall, in addition to the duties prescribed under the Retirement Benefits Act receive the contributions remitted by the sponsors and members under this Act on behalf of the Board, not later than the next business day following receipt of the contributions from a sponsor, notify the fund manager and the administrator of such receipt.
The Custodian of the scheme shall receive and keep in safe custody the title documents, securities and monies of the Scheme in trust for the members and beneficiaries, collect dividends for the Scheme, report to the Board on any matter relating to the assets being held by the custodian on its behalf at such intervals as may from time to time be determined by the Board.
The bills seek to have the custodian of the scheme undertake statistical analysis on the investments and returns on investments with respect to funds in its custody and provide data and information to the administrator and the Board and submit to the Board a report on a quarterly basis, of the reconciliations with respect to the funds held by the Custodian.
“The custodian shall maintain all funds and assets in its custody to the order of the Board and shall not utilise any pension fund or assets in its custody to meet its own financial obligation, execute, on behalf of the Board, the relevant proxy for the purpose of voting in relation to the investments and perform any other function that may be assigned in the instrument of appointment or any other written law” states the bill.
The Scheme shall be administered by an administrator appointed by the Board who will be tasked to open and maintain an account for each member upon receiving details of the contributions remitted under this Act, causing the amount of the contributions to be credited to the account of the member in respect of whom the sponsor has made the payment.
The administrator shall be required to inform the Board if a member’s contribution details differ from the expected, provide customer support services to members, including access at least on a quarterly basis to members’ account balances and statements, and keep and maintain proper books of accounts of the Scheme.
The administrator shall be paid retirement benefits to a member who has retired, be responsible for all calculations relating to retirement benefits and carry out any other functions as may be directed by the Board from time to time.
