TelPosta Pension Scheme expects to complete the first tranche of sales of its major property holdings by September 2026, paving the way for a review of payouts to its more than 5,000 members.
The closed pension scheme is negotiating with government ministries to sell four strategic properties, with the transactions expected to unlock about Sh10 billion for reinvestment in more liquid assets and potentially improve returns to members.
Scheme administrator Peter Rotich said talks with the government entities are now at an “advanced stage”, with the Ministry of ICT and Digital Economy set to take TelPosta Towers and the Ministry of Defence taking the Gilgil GTI staff quarters.
The Interior Ministry, through the Kenya Police, will acquire the Makande and Bombolulu residential houses in Mombasa.
“Our talks are at an advanced stage and think we will be exiting the major property portfolios soon. We see end of September as a realistic date for closing the first tranche of the transactions,” said Mr Rotich.
The sales would allow the scheme to increase allocations to government securities, corporate bonds, money market investments, cash and infrastructure funds, which Mr Rotich said would help the scheme increase payouts to members.
Mr Rotich said members should expect a review of payouts after the disposal of the major property holdings, although the final decision will depend on advice from actuaries.
“Members’ expectation is high, and our plan is to review the payouts once we have completed the exit of major holdings in property investments,” he said.
“Trustees will take advice from actuaries to ensure we settle on what improves the welfare of members but at the same time is sustainable for the scheme.”
The scheme currently pays members an average monthly benefit of Sh11,895 and has paid more than Sh14.5 billion to its membership since it became a closed scheme.
TelPosta scheme recently dodged a Sh13.4 billion pension liability after the High Court dismissed claims by former members for additional payout, bringing to a close a 15-year legal battle that had threatened to plunge the fund into a massive deficit.
“The end of this case allows us to concentrate on delivering on our strategy of cutting exposure in properties and focusing on high-yield investments. We were able to prove our case,” said Mr Rotich.
The scheme has been seeking to reduce its heavy exposure to property, which accounted for 82.71 percent, or Sh12.21 billion, of its Sh14.76 billion investment portfolio as of June 2025.
The Retirement Benefits Authority investment rules cap pension schemes’ exposure to immovable property at 30 percent, making the planned disposals key to the scheme’s portfolio rebalancing.
The scheme was established in 1997 as a defined benefit scheme for Telkom Kenya employees and closed to new members and future accrual of benefits in November 2007.
Nearly 84 percent of its members are aged between 60 and 79 years, increasing pressure on trustees to ensure the scheme generates sufficient income to meet its obligations to a predominantly ageing membership.
TelPosta Towers, the scheme’s most valuable property, has 403,826 square feet of space spread across 29 floors along Kenyatta Avenue, with 98 percent of the space occupied by government ministries.
The Gilgil property comprises 174 rental units and 68 acres of undeveloped land, while the Makande and Bombolulu properties in Mombasa comprise 100 and 88 residential units respectively.
TelPosta scheme is also targeting another Sh5 billion from the sale of other properties spread across the country, taking the potential proceeds from the wider disposal programme to about Sh15 billion.
The property disposal is expected to reduce the scheme’s exposure to the administrative costs associated with managing real estate.
Between 2001 and 2025, it spent Sh532.38 million on property-related legal costs, involving efforts to recover properties from non-paying tenants, illegal occupants and property grabbers.
