(NAIROBI, KENYA) – A pension fund covering more than 5,000 former telecommunications workers in Kenya is preparing to sell its four largest property assets to government ministries by September 2026, a move that could deliver improved monthly payouts to its ageing membership.
The TelPosta Pension Scheme is in advanced negotiations with state entities, scheme administrator Peter Rotich confirmed. The transactions are expected to raise approximately KES 10 billion (USD 77.2 million, GBP 60.3 million), funds earmarked for redeployment into more liquid and higher yielding investments.
The Ministry of ICT and Digital Economy is set to acquire TelPosta Towers, the scheme’s most valuable property. The Ministry of Defence will take over staff quarters in Gilgil, while the Interior Ministry, through the Kenya Police, will purchase residential houses in the Makande and Bombolulu areas of Mombasa.
Rotich said the talks had reached an advanced stage and that the first group of sales could close by the end of September 2026. “We see end of September as a realistic date for closing the first tranche of the transactions,” he said.
Proceeds from the disposals will be allocated to government securities, corporate bonds, money market instruments, cash holdings and infrastructure funds. Rotich said this shift away from direct property ownership would help the scheme increase returns paid to members.
The scheme currently pays an average monthly benefit of KES 11,895 (USD 91.80, GBP 71.70). It has distributed more than KES 14.5 billion (USD 111.9 million, GBP 87.4 million) to its membership since it closed to new entrants and future accrual of benefits in November 2007.
Rotich said members should expect a review of payouts once the exit from major property holdings was complete, though trustees would rely on actuarial advice before making any final decision. “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,” he said.
The planned property sales follow a High Court ruling that dismissed claims by former members seeking an additional KES 13.4 billion (USD 103.4 million, GBP 80.8 million) in benefits. The ruling brought an end to a 15 year legal battle that had threatened to push the fund into a large 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,” Rotich said.
The scheme has been working to reduce its heavy concentration in real estate. As of June 2025, property accounted for 82.71 percent of its total investment portfolio, equivalent to KES 12.21 billion (USD 94.2 million, GBP 73.6 million) out of KES 14.76 billion (USD 113.9 million, GBP 89 million) in assets under management.
Retirement Benefits Authority investment rules cap a pension scheme’s exposure to immovable property at 30 percent of total holdings. The planned disposals are central to the scheme’s effort to rebalance its portfolio and comply with regulatory limits.
The TelPosta Pension Scheme was established in 1997 as a defined benefit arrangement for employees of Telkom Kenya. It closed to new members in November 2007. Nearly 84 percent of its members are now aged between 60 and 79 years, placing additional pressure on trustees to generate sufficient income to meet obligations to a predominantly elderly membership.
TelPosta Towers, the scheme’s most valuable asset, spans 403,826 square feet across 29 floors on Kenyatta Avenue in central Nairobi. Government ministries occupy 98 percent of the building’s leasable space.
The Gilgil property consists of 174 rental units and 68 acres of undeveloped land. In Mombasa, the Makande and Bombolulu properties comprise 100 and 88 residential units respectively.
Beyond the four main assets, the TelPosta scheme is also targeting another KES 5 billion (USD 38.6 million, GBP 30.2 million) from the sale of other properties across Kenya. This would bring potential total proceeds from the wider disposal programme to approximately KES 15 billion (USD 115.8 million, GBP 90.5 million).
The property exit is also expected to reduce the administrative and legal costs linked to managing a large real estate portfolio. Between 2001 and 2025, the scheme spent KES 532.38 million (USD 4.1 million, GBP 3.2 million) on property related legal expenses, mainly in efforts to recover assets from non paying tenants, illegal occupants and property grabbers.
TelPosta Pension Scheme: Key Figures at a Glance
| Metric | Detail | Value (KES) | Value (USD) | Value (GBP) |
|---|---|---|---|---|
| Planned Sales (Phase 1) | Four government bound properties | 10.0 billion | 77.2 million | 60.3 million |
| Wider Disposal Programme | Total targeted property sales | 15.0 billion | 115.8 million | 90.5 million |
| Total Investment Portfolio | As of June 2025 | 14.76 billion | 113.9 million | 89.0 million |
| Property Exposure | 82.71% of portfolio | 12.21 billion | 94.2 million | 73.6 million |
| Regulatory Cap | Maximum property exposure | 30% | – | – |
| Average Monthly Benefit | Current member payout | 11,895 | 91.80 | 71.70 |
| Total Payouts Since 2007 | Distributed to membership | 14.5 billion | 111.9 million | 87.4 million |
| Dismissed Liability | High Court ruling on former members’ claim | 13.4 billion | 103.4 million | 80.8 million |
| Property Legal Costs | Total spent 2001–2025 | 532.38 million | 4.1 million | 3.2 million |
| Membership | Total scheme members | 5,000+ | – | – |
| Members Aged 60–79 | Share of total membership | 84% | – | – |
| Key Asset | TelPosta Towers (29 floors, 403,826 sq ft) | – | – | – |
| Gilgil Property | 174 rental units, 68 acres land | – | – | – |
| Mombasa Properties | Makande (100 units), Bombolulu (88 units) | – | – | – |
Exchange rates used: 1 USD = 129.50 KES, 1 GBP = 165.80 KES (indicative rates as at 12 August 2026).