RBA orders KNH to pay 114 retired staff Sh126 million

A view of Kenyatta National Hospital in Nairobi. The Retirement Benefits Authority has ordered the hospital to pay 114 former workers a total of Sh126 million in retirement dues. PHOTO | FILE | NATION MEDIA GROUP 

In Summary

• The complainants in the matter were members of the KNH Staff Superannuation Scheme (KNHSSS).
• The board of the scheme will now pay them Sh123,485,328 in the lump sum amount and Sh2,521,824 in monthly pensions, a total of Sh126,007,152.
• In its ruling, the authority declared the 2012 TDR as valid and the one that should have determined the pension payable. It said the amendments diminished the accrued benefits of KNHSSS members.

   

By RICHARD MUNGUTI
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The Retirement Benefits Authority (RBA) has directed Kenyatta National Hospital (KNH) to pay 114 former employees a total of Sh126 million in terminal dues.

The RBA said on Tuesday that the largest referral hospital in the country underpaid the former workers' lump sum amounts and monthly pensions.

The complainants in the matter were members of the KNH Staff Superannuation Scheme (KNHSSS).

The board of the scheme will now pay them Sh123,485,328 in the lump sum amount and Sh2,521,824 in monthly pensions, a total of Sh126,007,152.

THE COMPLAINTS

The former staff, through lawyer Titus Koceyo, had urged the authority to nullify the rules and the formula trustees used to calculate their dues.

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Mr Koceyo said the trustees reduced amounts payable by invoking the amended 2016 Trust Deed and Rules (TDR) instead of using the 2012 TDR.

The amended rules affected the accrued benefits paid to employees who retired between 2011 and 2017.

Mr Koceyo further said the amended rules were used prospectively instead of retrospectively.

The complainants also noted that the scheme's trustees had the legal mandate to amend the TDR since the terminal dues payable would be affected.

FORMULA ILLEGAL

The scheme was established in July 17, 1991 through an original TDR, which was amended and replaced in December 27, 2001.

The TDR was subsequently amended in March 2012 and later in February 16, 2016.

Mr Koceyo said the 2016 amendments were discriminatory and should be quashed.

In its ruling, the authority declared the 2012 TDR as valid and the one that should have determined the pension payable. It said the amendments diminished the accrued benefits of KNHSSS members.

“A declaration that backdating the amendments of the 2016 Deed of Amendments and Closure was wrongful, illegal and unconstitutional and therefore a nullity,” the RBA said.

It added: “We find that the accrued benefits prior to 2011 have been reduced by the application of the said definition/ formula, hence [are] illegal and unlawful."