TelPosta Pension Scheme is eyeing about Ksh11 billion ($84.62 million) from the scheduled disposal of four strategic properties to the government as part of a plan to cut its exposure in the property market to the permitted maximum of 30 per cent.

The pension scheme has about 83 per cent of its investment portfolio in land and real estate properties.

The move will see the scheme dispose of several prime property holdings, including the iconic TelPosta Towers in Nairobi, as it moves away from traditionally immovable assets such as real estate investments toward more flexible financial instruments.

According to Scheme’s Trustee Ignatius Wamalwa, the move to pivot from over-reliance on fixed assets to liquidity is part of the scheme to ensure that it offers its members a return that takes into account the inflationary pressures they face day to day, arguing that some pensioners take home as little as Ksh11,895.

Increasing their exposure to liquid assets, Mr Wamalwa indicated, will allow them to tap into new asset classes such as the government-backed National Infrastructure Fund, the bond market and other securities.

Speaking in Nakuru, he expressed optimism that the move will deliver more revenue and align with regulatory requirements to hold assets up to a maximum of 30 per cent of the portfolio.

Wamalwa said, “We are rebranding because we are exiting the property portfolio. Once we exit, we will have a new way of doing things, because the moment we exit from 83 per cent maybe to 35 per cent, there will be other benefits that will accrue to our members as we will review the benefits in payments that are very critical,”.

The planned asset liquidation is coming at a time when pension schemes are under growing pressure to balance long-term returns with short-term liquidity needs. In the liquidation, the scheme is seeking to raise between Ksh10 billion and Ksh11 billion, representing an equivalent of 70 per cent of their total assets under management.

As of June 2025, about 83 per cent of the scheme’s Ksh14.76 billion portfolio was in land and real estate, violating the regulatory cap of 30 per cent.

Other properties, lined for sale according to Wamalwa are spread out in Gilgil, Mombasa (Makande and Bombolulu), among other towns.

The proceeds will be shifted into liquid, higher-yielding assets like government bonds and infrastructure funds. Wamalwa disclosed that the scheme’s residential properties were generating negative returns of approximately 2 per cent, with only one property yielding close to 7 per cent while administrative costs were high.

“As a closed scheme with over 5,000 members (most aged 60-79), the cash demand for monthly payments (averaging Ksh11,895 per member) is growing, necessitating liquid cash over fixed property. The scheme has also been working with the DCI to recover at least Ksh1.2 billion worth of assets previously grabbed by private individuals.

The trustee indicated that the restructuring is expected to improve the financial health of the scheme and allow for a potential review of the benefits paid to the former employees of the East African Posts and Telecommunication Corporation (EAPTC) and Kenya Posts and Telecommunication Corporation (KPTC).

“Being closed, we have to be very conservative because our members are old so we are very conservative where we put our funds. TelPosta Towers will go on the market. We are already having engagement with government, we are also going to dispose of Bombolulu, Makande, Aga Khan, GTI and other properties,” Wamalwa said.

According to Rosemary Ambai, also a trustee of the scheme, although property investments have historically delivered stable returns, the overhead cost of maintaining and running them has resulted in the consideration.

“We want to ensure that members get value for money from the assets they have and that explains why we are moving from our property holdings, which have been generating very low returns,” Ms Ambai revealed.

“It’s only one property that has been giving us close to 7 per cent. The other properties/residential have been giving us close to negative 2 per cent, and we have been spending so much in administrative cost,” she explained out.

The liquidation process is set to take the next two years, with the scheme committing to engage actuaries to help determine how the benefits will go to members.

The various scheme properties are located in Nairobi, Naivasha, Nyandarua, Karatina, Nyeri, Nanyuki, Isiolo, Kericho, Sotik and Eldoret.

In Nairobi, a vacant plot on L.R No. 209/4844/33 off Jogoo Road will be sold. Two other vacant plots on L.R No. 1/1255 and L.R No. 1/1262 along Argwings Kodhek Road are also scheduled for sale.

Still in Nairobi, several flats along Elgeyo Marakwet Road, under Nairobi Block 17/415, will also be sold. These include both two-bedroom and three-bedroom flats.

In Naivasha, a bungalow located in Naivasha Town under Naivasha Municipality Block 2/1262 will be sold, while in Nyandarua County, several vacant plots located in Njabini Township will also be offered for sale.

In Karatina, four bungalows located next to Karatina Exchange will be sold, while in Nyeri a bungalow in Nyeri Town under Nyeri Municipality Block 1/1492 is also listed for disposal.

Meanwhile, in Nanyuki, a bungalow in Nanyuki Municipality, Block 9/191, Laikipia County, will be sold. In Isiolo, a bungalow in Isiolo Township, Block 1/891, is also among the properties scheduled for sale.

At the same time, several properties will be sold, including vacant plots and bungalows in Londiani, Kericho as well as bungalows located in Mjengo Staff Houses in Kericho Town.

Ms Ambai noted that the scheme has faced significant costs related to maintaining these properties, including over Sh532 million in legal costs to manage rent defaults and secure properties from grabbers.

The pension scheme, which has been struggling to maintain a balance between asset holdings and cash flow, is required by law to reduce its property investments to 30 per cent of total assets. Currently, its real estate holdings account for over 80 per cent of its portfolio.

National Treasury had in December 2024 approved Telposta Pension Scheme’s request to sell the properties on condition that properties in key locations be offered to the government first.

Telposta Towers, the most valuable property in the deal, is located on Kenyatta Avenue in Nairobi’s central business district. Managed by Tysons Limited, the 29-floor building has a total space of 403,826 square feet, with 10 government agencies occupying 92 per cent of it. The agencies pay an estimated Ksh60 million in rent per month.

Documents show that the government has spent Ksh3.7 billion in rent over the past five years for space it occupies in the building. As of June, last year, Telposta Towers was valued at Ksh6.5 billion.

Ms Ambai said the sale is necessary to align with regulatory requirements and improve the scheme’s liquidity, which has been steadily declining due to ongoing pension payments and administrative costs.

“Over the years, the liquid assets have been going down because of liquidation (paying members’ benefits) and administrative costs, and we have been remaining with properties. When you hold a lot of your assets in brick and mortar, you do not pay members pension through brick and mortar,” she offered.

By the end of 2025, the scheme held Ksh2.7 billion in cash out of total assets worth Ksh14.7 billion, while properties accounted for Ksh12.08 billion.

The trustee further indicated that, upon completion of the sale, the scheme may consider reviewing pension payments by either increasing pay-outs or issuing one-off bonuses to members.

The scheme’s financial records show that in 2025, it paid out Ksh1.07 billion in pension benefits, up from Ksh860.7 million in 2023.

The government’s acquisition of the properties is expected to provide TelPosta Pension Scheme with the much-needed financial flexibility to continue supporting its pensioners while aligning with investment regulations.

• A Tell Media / KNA  report / By Jane Ngugi and Dennis Rasto