There will be no amendment to the regulations to make it compulsory for pension schemes to pay fund trustees.
Acting Retirement Benefits Authority (RBA) Chief Executive Nzomo Mutuku said in an interview that trustees would only be paid if pension scheme members decide to do so during their annual general meetings.
Mr Mutuku was responding to questions concerning a report published by leading pension fund manager Enwealth Consultancy, which had recommended that fund trustees from Kenya’s 1,500 pension funds be remunerated for their oversight role.
“You cannot force pension scheme members to remunerate trustees. They have to vote on that. This will depend on how the trustees have performed in safeguarding the proper governance of a pension scheme to ensure good returns for the members,” said Mr Mutuku.
According to the Enwealth report, only 32 per cent of trustees in the country are remunerated.
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The average amount of remuneration per annum is Sh33,000, with a minimum of Sh3,000 and a maximum of Sh100,000.
The report also said there was no longer much substance in the role that trustees play and that many of them were not keen on playing their role since they do not get paid for their services.
It also pointed out that even the law was not clear on the guidelines that should be followed before trustees are remunerated. In the UK and South Africa, it is compulsory to remunerate trustees.
The retirement benefits sector has grown tremendously over the years, with the value of pension fund assets growing five-fold in the past 10 years to Sh1 trillion.