Nairobi, June 11 -- The Supreme Court of Kenya's decision declaring unconstitutional the application of the Public Procurement and Asset Disposal Act (PPADA) to pension schemes sponsored by public entities is one of the most consequential rulings for the retirement benefits sector in recent years.

At its core, the judgment settles a long-standing governance question the industry has had: Are pension assets public funds because the sponsoring employer is a public institution, or are they private trust assets belonging to scheme members? The court provided a definitive answer.

Once pension contributions are remitted into a retirement benefits scheme, they cease to be public money and become trust property held exclusively for the benefit ...