The main purpose of the Kenya Power Pension Fund is to provide benefits and pension for all permanent and pensionable employees of Kenya Power. The fund also provide benefits and pension to dependants of employees who die in service. The Fund has gone further by running an Orphan Trustee Program (OTP) as part of its Corporate Social Responsibility from Group Life Insurance benefits to ensure continuity in the education of the deceased employees children.
How the Fund works
The Kenya Power Pension Fund has two Funds, namely;
a. Defined Benefits Fund (DB): In a Defined Benefits Fund, the following are key factors:
- Benefits payable are calculated using a pre-determined formula
- The Sponsor/Founder guarantees the Fund
- Benefits payable are based on employee’s basic salary and membership years
Members of the DB Fund are all the serving employees who were permanent and pensionable employees of the Employer as at 30th June 2006. Upon the recommendation of the actuaries the Fund was closed and no further contributions are paid to the Fund. However, up to the closure date contributions by members were 5% of the member’s pensionable salary, while the Employer contributed 10% of the member’s pensionable salary.
b. Defined Contributions Fund (DC): The Fund works like a savings account. Every month the member and the Sponsor make contributions into the Fund. The member account is divided into two parts, the member’s portion and the employer’s portion. The Member Account is invested by the Trustees with professional advice from investment managers and grows broadly in line with the returns achieved each year on the investments. At retirement the value of the Member Account determines the cash lump sum and monthly pension payable. Therefore the key factors that determine ones benefits are;
- A member’s contribution.
- Employer’s contributions.
- A member’s Additional Voluntary Contributions (AVC) which is optional.
- Returns on Investments.
In the Members Login, one can view their current member’s contributions statements and dependant’s details at their own convenience.