Acting RBA chief executive Nzomo Mutuku. FILE PHOTO | NMG
Summary
- The Retirement Benefits Authority says pension schemes whose reporting period ends in December must have publicly released results by Friday.
- This is after Treasury secretary Henry Rotich, through the Finance Act 2016, introduced amendments defining the reporting period for retirement schemes effective January 2017.
- Kenya’s pension schemes are seen to be largely opaque, with many lagging in their reporting, leaving pensioners and contributors groping in the dark.
Chief executives and trustees of pension
schemes in Kenya face a two-year jail term if they fail to publish
their audited results three months after close of fiscal year, the
industry regulator has warned.
The Retirement Benefits
Authority says pension schemes whose reporting period ends in December
must have publicly released results by Friday, or face jail together
with a Sh500,000 penalty. Nine out of every 10 pension schemes or a
total of 1,153 retirement funds, have their financial year ending
December 31, according to RBA data.
“Failure to submit
audited accounts is an offence and a trustee shall be liable on
conviction to a fine not exceeding Sh500,000 and imprisonment to a term
not exceeding two years,” said Nzomo Mutuku (pictured), acting chief
executive at RBA.
“The level of compliance can only be
determined after the due date,” Mr Mutuku told the Business Daily. Some
schemes such as county workers’ pension fund CPF and National Social
Security Fund have their fiscal years ending in June, and must therefore
publish results by close of September.
This is after
Treasury secretary Henry Rotich, through the Finance Act 2016,
introduced amendments defining the reporting period for retirement
schemes effective January 2017. The new requirement forcing retirement
schemes to publicly publish their financial reports is a fresh strategy
to enhance transparency and integrity in Kenya’s Sh1 trillion pension
industry.
Kenya’s pension schemes are seen to be
largely opaque, with many lagging in their reporting, leaving pensioners
and contributors groping in the dark. State-backed NSSF released its
financial statements for the period to June 2015 mid last year and is
yet to publish results for the year to June 2016. Alexander Forbes Kenya
chief executive Sundeep Raichura though said employer-sponsored schemes
only need to submit their financials to the regulator, but public
schemes must publish their performance in the dailies.
The
new reporting timeframe for the pension industry puts retirement
benefits schemes at par with commercial banks and deposit taking
micro-financiers and insurance firms.
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