Implementation of strategic change to sustain defined benefits pension scheme of the Local Authorities Pension Trust in Kenya.
Local authorities Pension Trust, like any other organization whether in public or private organization is directly or indirectly affected by the changes taking place in the environment in which they operate. It therefore becomes apparent for organizations to prepare themselves by formulating and implementing strategies that will enable them to exploit the opportunities and keep threats at bay. Strategic change management is now a bell weather event hence is a routine management issue that requires concentration for its benefits to be realized. Laptrust has undergone substantial metamorphosis and has lived to see the challenges so much so that during the period of liberalization in the late 1990’s through early 2000 in Kenya saw it readjust its operational activities in the quest of establishing a viable fit in the retirement benefits industry. There were challenges such as cut throat competition, high customer expectations, inflation and in the late 2002, the birth of regulator (RBA) which came with stringent rules regarding investment portfolios by the players in the industry. The global trend in the social security industry where pension schemes are shifting from defined benefits to defined contributions owing to the challenges associated to the former than the later such as; liability remaining with the sponsor ( scheme) in case of underfunding, the predetermination of benefits, the use of formula to compute benefits, and the incorporation of period of service rather than contributions received to establish the payable benefits, all poses a challenge to the scheme to warrant strategic change process. vii The study therefore sought to establish how strategic change management has been implemented to sustain the defined benefits pension scheme by Laptrust. The study involved collection of both primary and secondary data from various sources in the organization. The findings were that, the change management process is planned. The entire organization owns it both bottom up and top down. A task force was appointed in 2005 which carried out a sample survey of the business processes vide a pilot SWOT analysis and some of the areas under study were, business processes, employee working relations, working tools sufficiency, staff competences, membership records update, debtor status among others. With the help of consultants, the findings were discussed and proposals made and presented to the board of trustees whose receptive support made the project see the light of the day. As a ground breaking exercise to pave way for the reforms, the schemes name was ceremoniously changed from the very long KLGOSF to LAP Trust, followed by other crucial internal changes. Lap Trust launched its vision, mission and strategies to address the critical issues threatening the sustainability of the defined benefit scheme. Despite the various constraints, change management made considerable gains ranging from; increased membership from 10,000 to 27,000 within a period of three years; enhancement of human resource from 30-70 competent staff; effective and efficient ICT; effective customer care; enhanced business portfolios hence growth of asset base from Ksh 3 billion to 7 billion.