High interest rates to affect Britam’s share earnings

Britam Managing Director Benson Wairegi. He said the company's 2015 earnings per share "may not perform very well" given the rise in interest rates. FILE PHOTO | SALATON NJAU | NATION MEDIA GROUP 

In Summary

• Britam has promised to foot the pension funds audit fees, levies paid to the Retirement Benefits Authority and its own administrative fees charged as the trustee.
• A member will receive up to 15 per cent of the funds deposited.

By OTIATO GUGUYU
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British American Investment Company (Britam) has said the 2015 earnings per share "may not perform very well" given the rise in interest rates, the weakening of the shilling and the poor performance of equities at the Nairobi Securities Exchange.

“As the fund manager said, 2014 was a great year but 2015 has not been so good; however, in the long run, your fund will be profitable,” Britam Managing Director Benson Wairegi said Friday at the Pension Funds annual general meeting in Nairobi.

Mr Wairegi also announced that the company has waived administrative fees for its pension scheme portfolios, which grew to over Sh5 billion in 2014.

Britam has promised to foot the pension funds audit fees, levies paid to the Retirement Benefits Authority and its own administrative fees charged as the trustee.

Mr Wairegi said in 2013, only one of the firm’s pension schemes had over Sh1 billion in funds but the company has seen the portfolio grow, with all the four being above the Sh1 billion mark.

The firm has seen its individual provident fund increase 77 per cent, from Sh639 million to Sh1.13 million, while the personal pension scheme grew by 32 per cent from Sh1.1 billion to 1.5 billion.

The Umbrella provident fund gained 54 per cent, from Sh784 million to Sh1.2 billion, and the Umbrella Pension Scheme grew from Sh766 million to Sh1.2 billion, a 61 per cent growth in shareholder funds.

Britam continues to expand its products with the latest introduction of the Platinum Drawdown Plan targeting retired individuals and, most especially, government workers.

The product, managed through a guarantee fund and runs for a minimum of 10 years, gives a portion of their savings as income.

A member will receive up to 15 per cent of the funds deposited and will also have an option to receive a refund of the remaining amount at the end of the statutory period of 10 years

According to data from the Retirement Benefits Authority, out of Kenya’s workforce of about 10 million people, less than 20 per cent are saving for retirement using registered pension schemes