County Pension Fund (CPF) has launched an Islamic pensions product angling for more members even as fight to control retirement funds for county workers heats up.
The County Pension Scheme Bill of 2017 is being lobbied at the National Assembly Finance Committee with Majority Leader Aden Duale pitching for the fund during the launch of the new product, Salih, yesterday.
The draft law, which envisions Islamic products and has provided for a Sharia Supervisory Committee, may have inspired CPF to set up an outfit targeting to capture the market before its competitors.
CPF received regulatory approval from the Retirements Benefits Authority to create Salih, which is included in the pension scheme bill under the same name.
“Sharia compliant products we have developed shall be administered under the supervision and guidance of a team of Sharia scholars to ensure we conform with Sharia principles,” said CPF Chief Executive Hosea Kili.
Under the bill, Sharia pensions for county government workers will be overseen by at least three renowned Muslim scholars.
CPF, which runs Local Authorities Pensions Trust (Laptrust) and M-Pension, currently has over 80,000 county workers against an estimated total of 140,000 employees.
State-owned Local Authorities Provident Fund (Lapfund) has a membership of over 45,000 members with a fund value of Sh31 billion as at June 2017.
Both schemes are competing against each other for relevance and interpret the County Government Act in their favour.
Proponents of a merger of the two say it is the only way to bring uniformity in membership of county employees to a single scheme.
Mr Kili said the pension scheme law had already passed through Senate and is now in the National Assembly, which expressly names CPF as the custodian of county employees’ pension.
“We made engagements and from the Maazoni declaration we agreed that CPF takes over the pensions. We even sought the opinion of the Attorney General who said CPF is the scheme but we needed to entrench it in law,” he said yesterday.
Since its approval, the Sharia compliant platform available to both CPF members and voluntary individual pension fund members, has attracted over 6,600 members with a fund value of Sh850 million.
Funds under Salih have to be invested in conformity with Sharia principles that prohibits interests and investment in non-permissible ventures such as alcohol, pork, tobacco and gambling.