Unclaimed Financial Assets – A source of Funding for Social Protection PPT to PS Gender & Social Development Dr. James Nyikal 09.11.2011

7/28/2019 Unclaimed Financial Assets A source of Funding for Social Protection PPT to PS Gender & Social Development Dr. James Nyikal 09.11.2011

1/12

By Mr. Joe K. Ngigi - Unclaimed Property Assets

Register (K) Limited


2/12

Introduction The Unclaimed Financial Assets Bill 2011 Why Unclaimed Assets is a solution to social

protection Models that would be of Interest to Kenya Possible structuring of the unclaimed

financial assets regime to support social

protection The Way Forward Questions & Answer End


3/12

Unclaimed property is a term that refers to assetsthat have had no owner-generated activity for adefined period of time.

Financial asset types include uncollectedInsurance policy benefits, Quoted companiesdividends and share scripts, Utility deposits inenergy and water firms, Deposits in banks andsaccos to mention a few (I,Q,P,U,D)

A GoK Ministry of Finance Taskforce in 2008estimated the overall figure of unclaimedfinancial assets to be in the range of Kshs. 38.4Billion and Kshs. 81 Billion in the private sectoralone;


4/12


5/12

Compels holding institutions to identify,segregate, report and manage these assetswith regulatory oversight

Provides for reunification mechanism forclaimants before their transfer to aprofessionally managed, Central Reclaim

Fund; Offers Government a significant non-tax

revenue opportunity for Vision 2030projects and initiatives


6/12

The target has been mainly those in formal employment,making their contribution to the National Social SecurityFund to cater for their retirement;

Public sector workers have been on a defined benefit

scheme. A defined contribution system was mooted andhas been in the pipeline for a while, and itsimplementation is one that GoK is grappling with at themoment

Extension of the retirement age is in part due to lack of

resources to sustain the defined benefit scheme; Direct remittances introduced to the most vulnerable

group (the aged), but given the economic conditionscurrently, the values remitted to each individual may not

have real impact in terms of making ends meet


7/12

A continuous stream of investment income, giventhat almost 70% of these funds will never bereclaimed;

A critical component that safeguards socialprotection programmes from consolidatedfunding that may become non-priority due toeconomic downturns (shocks such as the Kenyan

shilling devaluation).Note:Our proposed suggestion is that a percentageof the income realized from the Trust Fundsinvestment be allocated towards curative socialProtection programmes


8/12

REPUBLIC OF IRELAND

Unclaimed Assets managedby the National Treasury

Management Agency Social protection in terms

of health, the aged andhealth allocated 10% of theinvestment income fromthe Trust Fund

Some of these fundsallocated to programmes inthe developing economies Asia, the Middle East andAfrica

THE US SOCIAL SECURITYSYSTEM Every individual has a social

security number which is alsoa point of reference foreverything tax returns,immigration, etc.

Unclaimed property managedby the State Treasurers office.States like Florida have usedunclaimed property toenhance and upgrade the

public school system. Inexcess of US $ 1.6 Billion hasbeen injected into theeducation system to make itcompetitive.


9/12

Social infrastructure a critical deliverymechanism for Vision 2030 overall goal of

attaining middle-income country status; A fixed % of investment income from the

Trust Fund (say between 5.0 to 7.5%), beallocated towards sustainable health,education and housing needs andpriorities to the disadvantaged andvulnerable groups.


10/12

Insist on the literate (professionals, civil service, businessexecutives) to ensure succession planning through thewriting of wills and accurate record-keeping of their assets(preventive social protection)

Advocate and lobby for the inclusion of social protection

initiatives as a beneficiary of the investment income of theUnclaimed Assets Trust Fund for the publicgood of allcitizenry (curative social protection);

Persuade and engage stakeholders for augmenting the

resourcing of social protection initiatives. Developmentpartners models that have been successful such as those inthe Scandinavian economies need to be reviewedalongside the gains and benefits that would accrue fromunclaimed financial assets (sustainable social protection

model replication)


11/12


12/12

Contacts:Mr. Joe K. NgigiChief Executive

U.P.A.R (K) LimitedP.O. Box 55229 00200

City Square,NAIROBI.

Office Tel: +254-20-8013977Cell Phone(s): +254-723-274883/789-274883

E-mail:[email protected]
mailto:[email protected]:[email protected]:[email protected]

Documents

Unclaimed Financial Assets – A source of Funding for Social Protection PPT to PS Gender & Social Development Dr. James Nyikal 09.11.2011