Kenya: Rail fund and pensioners in blame game

[John Ashworth]

Rail fund and pensioners in blame game

By FRANCIS MUREITHI, fmureithi@ke.nationmedia.com
Daily Nation
Posted Thursday, September 30 2010 at 20:02

At the age of 60, Mzee Sylvester Were is supposed to be enjoying his pension. But since he was retrenched from the Kenya Railways in September, 1998 , life has been a struggle as the financially troubled Kenya Railways Staff Retirement Benefits Scheme has been delaying his monthly pension for up to three months.

Many of the pensioners are living in squalid conditions while others have been evicted from their houses for non payment of rent; others are now beggars in the streets.

“I’m supposed to be enjoying my twilight years after tolling for decades, and its therefore sad for some of us to beg,” said Mr Were.

Two in university

But unlike other pensioners, Mzee Were counts himself lucky as he is supported by his wife who is a P1 teacher to take care of their five children — two of them in university.

According to Mzee Were, when he was sent home, the scheme had a healthy bank account and retirees were assured by managers they would be receiving their pension in their bank account by 25th of every month.

The scheme is believed to be the richest in the country as it owns property in Nairobi and its environs worth billions of shillings.

While the scheme has such extensive prime properties in the city, its more than 9,000 members are still owed millions of shillings in pension arrears.

The Kenya Railways Pensioners Association secretary-general Robert Azaria blames poor management of pensioners fund as one of the main reasons that is derailing the scheme.

The association has raised the alarm over the irregular disposal of the scheme’s property.

“In January, we wrote a protest note to the Retirement Benefits Authority and we are still waiting to see what action RBA will take against the scheme board of trustees.” Said Mr Azaria.

A senior RBA official confirmed that the board had been carrying out investigations and will make its findings public.

“The RBA has finished its inspection and the board is considering what action to take against the management of the scheme,” the official said.

The official who asked not to be named as he is not authorised to speak on behalf of the RBA, said investigations started when the Kenya Railways Pensioners Association raised the alarm over the irregular disposal of property.

Some of the prime properties the scheme owns in the capital city include several plots along Valley Road, Ngong Road, Ngara, Muthurwa, Makongeni, Matubutu, Gakuo Court and the prestigious Railways Club.

Mr Azaria now wants the Kenya Anti-Corruption Commission to investigate the board.

Now, some pensioners in Nakuru are running out of patience and have threatened to go to court unless they are paid their long standing dues immediately

According to Mr Azaria, his association has written several letters to the board of trustees to convene an urgent meeting to sort out the mess, but the board has snubbed the association.

“We are worried that our pension scheme will collapse due to under-table dealings which have seen a number of our property disposed in unclear manner.” he said. Mr Azaria said a prime property at the City centre was leased to foreigner in unclear circumstances.

But the scheme’s chief executive officer, Mr Mathews Tuikong denies any wrong-doing. “Any property we advertise for sale is sanctioned by the board of trustees and all the procurement rules and regulations are adhered to,” said Mr Tuikong. He accused Mr Azaria of maligning the “good name of the scheme” by issuing falsehoods in the media.

The CEO admits that the scheme is facing cash flow problems and hence the need to dispose property in order to meets its financial obligations.

For the past two months delays in remitting the pensioners dues has inconvenienced thousands whose only source of income is their monthly pensions.

Mr Tuikong says the scheme spends Sh50 million every month to pay pensioners but the problem is aggravated by some of their tenants who have defaulted in paying rent for years.

At the same time he says the annual increase of the pensioners in the payroll has seen the monthly budget “burst”.

“In 2006, our monthly budget stood at Sh28 million but come this year it has almost doubled and the budget has shot up to Sh54 million,” said Mr Tuikong

The poor relationship between the pensioners association and the scheme has seen the latter terminate a contract it had awarded the association to collect rent.

The association has since moved to the High Court in Nairobi to protest the arbitrarily termination of the contract.

“This war is not just about to end until all our dues are fully paid,” said Mr Azaria.

He claimed many pensioners were not likely to live for five years after retirement if the financial frustration persisted.