NCBA #ticker:NCBA, Stanbic #ticker:SBIC and Co-op Bank #ticker:COOP have won a lucrative contract to keep more than Sh31.2 billion in annual pension contributions by public servants following the rollout of the fund on January 1 this year.
The Treasury picked the three banks as custodians of the billions of shillings collected from more than 350,000 civil servants, including police officers and teachers, who started contributing to their own pension saving scheme eight months ago.
CPF Financial Services Limited will be the fund administrator for the Public Service Superannuation Scheme (PSSS).
“The three banks (NCBA, Stanbic and Co-op) were picked from a competitive exercise and the process of contracting them is underway,” a senior source at the Treasury told the Business Daily without disclosing details such as bids scores or the amount that will be charged by the three banks to keep the pension assets.
All top banks officially registered as custodians of pension funds had tabled applications for the contract.
Civil servants started contributing to their pension savings scheme wit the first 7.5 percent deductions from their monthly pay in January —ending 12 years of postponement. The idea was mooted in 2008.
There are 11 officially registered custodians of pension funds in the country including; Bank of Africa, NCBA Bank, Equity Bank, I&M Bank, KCB Bank, (National Bank of Kenya) and Prime Bank.
Others are SBM Bank, Stanbic Bank, Standard Chartered Bank, and Co-operative Bank.
The custodian will be expected to hold pension funds and assets in safe custody on trust for the members and beneficiaries of the retirement savings account.
The Treasury says that the PSSS will initially have about 350,000 members, with a combined employer and employee monthly contribution projected at Sh2.6 billion.
The scheme covers respective eligible employees of the various agencies grouped as civil servants under the PSC (33,494), teachers under the TSC (127,000), and other personnel (99,053).In addition to keeping all the schemes’ assets, the selected custodians will produce quarterly financial management reports on the fund.The three financial institutions were allocated portfolios based on the scores in metrics such as experience in custodial services for pension schemes with a fund value of at least Sh10 billion.The Treasury in decision to award the deal to NCBA, Co-op and Stanbic banks also considered their charges for the safe custody of the money as well as the interest to be earned.A custodian will also carry out statistical analysis on the investments and returns on investments from pension […]
