NAIROBI, KENYA: The Kenya Railways Staff Retirement Benefits Scheme (KRSRBS) has cleared a Sh400 million debts owed to its pensioners.
The scheme's boss Simon Nyakundi said apart from clearing the long three year old debt, pensioners have had their monthly earnings up by 200 percent compared to 2013 when he assumed office.
"Back then, the lowest pensioner was getting Sh2, 000 but now they are at Sh4, 000," said Nyakundi to The Standard.
He argued that rent collection from the scheme's houses had gone up by 84 percent from Sh26 million per month to Sh48 million. This is despite the scheme being seen to face liquidity challenges that has made it sell off some of their major properties at huge losses in a bid to pay the over 10,000 pensioners.
An example being the 6.5 acre property in Upper Hill that was allegedly sold in 2015 at a loss of Sh213 million when the market value was actually over Sh475 million.
However, a group of pensioners from the Rift Valley Railway Workers Union led by their Deputy Secretary General David Ogego alleged that the scheme has not only been mistreating the old pensioners with pension miscalculation and late payment but also has not effected the Trust Deed and Rules of 2008 that allocated them a pension increment of eight per cent.
"What we follow is the Treasury Circular of 2010 embedded in the constitution that capped annual pension increment for public servants at three percent. This is automatic, we do not have to go back to seek approval," said Nyakundi.
He added: "Increment of pension nevertheless depends on many factors including how the company including its affordability and liquidity."
The pensioners argued that the scheme should be collecting a monthly rent of Sh200 million but it just does barely above Sh45 million: "Pensioners require at least Sh75 million which means we have a shortfall of Sh30 million every month hence they have to sell properties at a loss to service the pension."
Nyakundi admitted to several existing challenges and said diverse ways of funding the scheme are being sort for long term and sustainability.