What you need to know:
- The Retirement Benefits Authority cited stiffer law that came into effect from October last year.
The Retirement Benefits Authority (RBA) says it will enforce penalties against laggard employers found culpable of not remitting or delaying remitting workers’ pension deductions.
The industry regulator cited stiffer law that came into effect from October last year.
The law that followed amendments to the Retirement Benefits Act stipulates employers face a penalty of five percent of the unremitted contributions or Sh20,000, whichever is higher.
The chief executives of the pension schemes who delay remitting audited reports to the regulator three months after the close of a fiscal year face a Sh100,000 fine and a further Sh1,000 for each day of delay.
“Employers are therefore advised to ensure timely remittance of contributions and those with outstanding contributions to ensure payment is made promptly,” said RBA in a notice posted on local dailies Tuesday.
Treasury secretary Henry Rotich, through the Finance Bill 2018, introduced amendments defining the reporting period for the retirement schemes effective October 2018.
Previously late submissions attracted a Sh5,000 daily fine for the schemes until the day financials were submitted, with no penalty for the bosses.
The new requirement forcing retirement schemes to publicly publish financial reports and employers to ensure they make timely staff contributions is a fresh strategy to enhance transparency and integrity in Kenya’s Sh1 trillion pension industry.
Schemes are seen as largely opaque with many lagging in reporting, leaving pensioners and contributors suffering. Some rogue employers especially counties have also been on the spot for failing to remit statutory contributions of employees.