The Kenya Power & Lighting Company Limited, Staff Retirement Benefits Scheme 2006 (“The Fund”) was established by a Trust Deed and started operations on 1 July 2006. The Fund was formed for the employees of the Kenya Power & Lighting Company Limited (“Kenya Power”) as a result of the closure of Kenya Power’s Defined Benefit Scheme (“DB Fund”) as per the recommendations of the actuarial report of 31 December 2005. The Fund is governed by a Trust Deed and Rules which have been approved by the Retirement Benefits Authority (RBA).
The main purpose of the Fund is the provision of cash benefits to the members upon attainment of the retirement age of sixty years, and where applicable, benefits for the dependents of deceased members. The Fund is approved by Kenya Revenue Authority as a retirement benefits scheme for the purposes of the Income Tax (Retirement Benefits) Rule No. 4 and is treated as an ‘exempt approved scheme’ for the purposes of that Act (1st Schedule 14). However, income generated from contributions in excess of the Ksh 20,000 per month per member statutory limit is subject to tax.
The Fund is a Defined Contributions Scheme. Any member who retires on his normal retirement date, or before, receives a pension for life of such an amount as shall be then purchased by his Fund Credit according to immediate annuity rates applicable at the time of purchase from an insurance company (which is also a registered insurer) selected by the member or where the pension is secured under the Scheme with the consent of the Sponsor, then as determined by the Trustees on the advice of the Actuary.
A member who is entitled to a pension under the Fund rules may however be paid, in lieu of the pension, a lump sum not exceeding one third of such pension. Where a member dies, eligible beneficiaries of the deceased member are entitled to a monthly annuity and a lump sum where applicable.
The members of the Fund comprise of active, in-service employees and deferred members of both Kenya Power and Lighting Company Limited and Kenya Electricity Transmission Company Limited. Eligible members are permanent and pensionable employees who are above the age of 18 years.
The Fund is managed by a Board of Trustees that is established under a Trust as required by the Retirement Benefits Act. The day-to-day running of the Fund is carried out by the Secretariat of the DB Fund that supports the Board in meeting its objectives.
The Secretariat headed by the Trust Secretary works in liaison with the Fund service providers that include fund managers, custodians, actuaries, lawyers and auditors.