Parliament has raised an alarm over more than Sh21 billion that State entities owe pensioners in unremitted deductions. FILE PHOTO | JEFF ANGOTE | NMG
The retirement benefits regulator must compel State-owned firms to settle unremitted pension deductions.
The pensioners are owed a total of Sh21.8 billion by 160 parastatals that have failed to remit workers’ deductions to their pension funds for investment in shares, government papers and private equities.
The pensioners have lost on two grounds. First, they have lost the opportunity to earn a compounded investment income in the period the State-owned firms have failed to remit the billions they have deducted from the workers’ payslips.
Secondly, the rise in unremitted pensions has left many retirees facing financial woes in their sunset years, leaving them dependent on relatives for key expenses such as medical bills and food.
The Retirement Benefits Authority (RBA)—whose key mandate is to protect gullible workers—has the legal backing to punish the parastatals and order them to remit the billions of shillings plus interest to the pension schemes.
The unremitted billions are an indictment of the RBA, pointing to its lax way of policing the pension markets amid the push from the State to grow retirement savings.They also signal a deepening of old-age poverty, which in itself has significant social implications in a country where the traditional patterns of the young caring for the old are changing.
Kenyans on average are living longer and the rank of the elderly poor is rising as the traditional social fabric yields to the forces of rapid urbanisation and changing social and filial trends. As the social fabric weakens and more people opt to retire in urban centres, the trend is increasingly becoming a headache to policymakers
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