Nairobi — The Government has been accused of selfishness in its budget proposal which forced all schemes with statutory contributions to invest only in its securities.

The proposal, contends the Association of Retirement Benefit Schemes (ARBS), was largely motivated by desire to boost government revenues than the wellbeing of contributors.

"We do not welcome this measure because it appears to be motivated more by a desire to expand investment in government securities than by concern for the interests of contributors to those schemes," Association of Retirement Benefit Schemes said in a statement read by its chairman, Lazarus Muema.

Association of Retirement Benefit Schemes was reacting to Finance minister Uhuru Kenyatta's proposal in this year's budget to amend the Retirement Benefits Act, so that new investments by pension schemes that receive statutory contributions invest in government securities and infrastructure bonds issued by public institutions only.

Investments

Noting that the proposal will affect schemes such as the National Social Security Fund, Mr Muema said such investments are unlikely to deliver yields above the inflation rate and does not address the real issues affecting these schemes, particularly governance.

"It is like imposing a permanent curfew on the innocent because we cannot keep the streets safe and yet we claim to care for their safety so much," he said, adding that the measure directly undermines the role and responsibility of trustees who have the primary responsibility of managing the assets of the fund.

Allocation

"They (trustees) should drive the asset allocation, subject to broad guidelines issued by the Retirement Benefit Authority," he said.He added: "It indirectly undermines the Retirement Benefits Authority itself in that it is a significant departure from the asset allocation guidelines prescribed by the Retirement Benefits Authority for other schemes."

Other analysts concurred with the association's sentiments.

Onchera George O'Maiko, the general manager in charge of investments at British-American Investments Company, agreed that the move would create a ready market for government paper.