The Teleposta Pension Scheme has announced plans to liquidate up to 70 percent of its asset portfolio valued at approximately Ksh.10 billion to Ksh.11 billion in a major strategic shift aimed at improving liquidity and strengthening its ability to meet member obligations.
The scheme’s total asset base currently stands at about Ksh.14.1 billion.
Exit from Property Investments
As part of the restructuring, the pension scheme will dispose of several high-value real estate holdings, including the landmark Teleposta Towers in Nairobi. Other properties earmarked for sale include Bombolulu, Makande, Aga Khan, and GTI assets.
The move signals a significant pivot away from traditionally immovable investments such as real estate toward more liquid financial instruments.
Focus on Liquidity and Member Returns
According to management, the decision is driven by the need to enhance returns for members while addressing inflationary pressures affecting retirees some of whom reportedly receive as little as Ksh.11,895 in monthly payouts.
By increasing exposure to liquid assets, the scheme aims to invest in alternative instruments such as government-backed infrastructure funds, bonds, and other securities. These investments are expected to generate improved and more consistent returns.
The shift also aligns with regulatory requirements that limit property investments to a maximum of 30 percent of a pension scheme’s portfolio.
Management Perspective
Chief Executive Officer Peter Rotich said the restructuring represents a broader transformation of the scheme’s investment strategy.
He noted that reducing property holdings from about 83 percent to roughly 35 percent—would unlock new benefits for members once payouts are reviewed.
Rotich added that while property investments have historically been stable, many of the scheme’s assets have delivered weak or negative returns.
“Only one property has been generating close to 7 percent, while others have recorded returns of around negative 2 percent, coupled with high administrative and maintenance costs,” he said.
Sector-Wide Pressures
The planned liquidation comes amid increasing pressure on pension schemes to strike a balance between long-term investment growth and short-term liquidity needs, particularly for ageing member bases.
As a closed scheme with a largely older membership, Teleposta has adopted a more conservative investment approach to safeguard benefits.
Implementation Timeline
The asset disposal process is expected to take place over the next two years. The scheme has indicated it will engage actuaries to guide the restructuring and ensure that member benefits are fairly recalibrated following the transition.
Outlook
The restructuring could mark a turning point for the Teleposta Pension Scheme, potentially setting a precedent for other pension funds navigating similar challenges in balancing asset performance, regulatory compliance, and member welfare.
