This product pools funds from different small pension schemes to one large fund and also offers a guarantee on the minimum return on the fund. Usually, the client is guaranteed that value of their investment will not fall below the capital contributed and that once a return has been declared at year end and credited to the client’s account; such return is guaranteed and cannot be lost in subsequent years.


  1. Scheme must be registered
    For a scheme to be managed on a segregated basis, the employer needs to set up the scheme and register it with the Retirement Benefits Authority and Kenya Revenue Authority. In cases where the employer has not set up their scheme, Madison Investment Managers can assist in this process.

  2. Funds held by a custodian
    The funds for the scheme will be held by a custodian bank appointed by the client. The custodian will ensure that funds are invested for the benefit of the scheme and are safe.
  3. Scheme to appoint trustees
    Once registered, the Scheme is considered an independent entity and must appoint trustees who will be responsible for the running of the scheme.

  4. Scheme to appoint administrator or own administrator
    The administrator will carry out the day to day administration tasks of the scheme which include, but are not limited to, keeping members records, communicating with members of the scheme, ensuring that the scheme is compliant with Retirement Benefit Authority regulations and other tasks as may be agreed with the Trustees of the Scheme. If the scheme is able, the law allows it to be own administrator.
  5. Must comply with Retirements Benefits authority  regulations
    The Scheme must comply with all regulations of the Retirement Benefit Authority that are generally intended to ensure that the funds are safe. In most cases, the Scheme Administrator and Fund Manager will advise the Trustees accordingly on compliance issues.
  6. Scheme size
    We generally advise that a Scheme have assets of more than Kshs 50 million to be managed in a segregated basis. Such amount of investment will allow the Scheme to undertake meaningful investment. For smaller schemes, we would advise a guaranteed fund.


Benefits of this product include:

  • A minimum level of return is guaranteed. This is very important for small pension schemes because they can, in turn, guarantee to their members that their contributions will not be lost under any circumstances;
  • The pension fund is able to participate in investments such as property that they would otherwise not afford on their own; and
  • The fund manager can diversify the investment by investing in different categories of investment and, therefore, reduce risk while at the same time improving return.
  • Members who contribute to a registered Scheme will enjoy tax deductions both on contribution to the Scheme and on return on the Scheme investments. They will enjoy further tax breaks when the finally get their benefits from the Scheme.
  • Madison Investment Managers charges a very competitive fee for the management of Scheme funds.