What you need to know:
- RBA director for research, strategy and planning Shem Ouma said the unremitted finances are an issue of concern.
- There are 176 registered pension schemes in Kenya that are licensed to collect retirement dues from Kenyans.
The amount of pension cash that employers are deducting from employees but not remitting to schemes has ballooned to Sh41.8 billion, spelling doom for thousands of workers who face life in retirement without the cash.
The Retirement Benefits Authority (RBA) says most of these employers are quasi-government institutions, mainly public universities. By September 2020, the outstanding amount stood at Sh35 billion.
RBA director for research, strategy and planning Shem Ouma said the unremitted finances are an issue of concern.
“That is indeed a problem because these are monies that have been deducted from workers and yet they are not hitting their pension accounts,” he said.
“It’s not small because if you retire today and your contributions are not hitting your pension scheme, you can imagine how your life is going to be.”
Dr Ouma made the remarks at the United Nations Complex during a symposium yesterday to mark the International Day of Older Persons.
The issue of non-remitted pensions has been a hot potato over the years, and in 2021 it made lawmakers pass a law (an amendment to the Retirement Benefits Act) that gave the Kenya Revenue Authority the powers to attach assets of employers who were not submitting deductions for their staff.
When that law was being passed, the University of Nairobi topped the list of defaulters, with a whopping Sh5.5 billion deducted from staff but not forwarded to the responsible pensions body. Jomo Kenyatta University of Agriculture and Technology was second at Sh3.5 billion, followed by Egerton University (Sh2 billion) and Moi University (Sh1.3 billion).
Other government agencies that have in the past been fingered for not remitting deductions include the Kenya Broadcasting Corporation and the Postal Corporation of Kenya.
“We are working together with the government (to solve this),” Dr Ouma told the gathering.
There are 176 registered pension schemes in Kenya that are licensed to collect retirement dues from Kenyans.
The International Day of Older Persons symposium was also attended by Social Protection Principal Secretary Joseph Motari, Prof Julia Ojiambo, the Netherlands and Norway ambassadors to Kenya, among other dignitaries.
In his speech, the PS said his office is currently drafting a law to provide guidance on the handling of Kenya’s elderly.
“Older people have not been having a law or a legislative framework,” he said. “We need something to be available to guide us.” He also announced that 500,000 new senior citizens have been added to the Inua Jamii programme, and that 1.5 million will be added over the next three years.
Prof Ojiambo noted that Kenya’s elderly are healthier and more tech-savvy than they used to be some years back and this can help them work from wherever they are.