Proposed amendment: Employers to face tough measures on pension dues

Treasury Cabinet Secretary Henry Rotich

Employers who fail to remit their employees' pension contributions face dire consequences if proposed amendments to the law on benefits pass.

Treasury Cabinet Secretary Henry Rotich says the Government will press for amendments to the Retirement Benefits Act; to empower the Retirement Benefits Authority (RBA) to go after employers who fail to remit the dues.

“We have cases of some employers who have failed to remit pension contributions to their respective retirement benefit schemes. I propose to amend the Retirement Benefits Act to enable the authority intervene against any employers who fails to remit such contributions to the scheme,” said Mr Rotich during the budget presentation in Parliament last week.

LEADING DEFAULTERS

Cases of State agencies and private corporations failing to remit their employees’ statutory contributions to relevant bodies such as National Social Security Fund are rampant, with county governments being the leading defaulters.

As at December 31 2017, counties were withholding their employees’ pension contributions to the two pension schemes – the Local Authorities Pension Trust and Local Authorities Provident Fund – amounting to almost Sh30 billion.

Audit firm PricewaterhouseCoopers (PwC) said empowering the RBA would enable it to levy penalties on defaulting employers, which would rouse those with huge debts into paying.

In addition, Rotich offered a new window for retirees to be able to get medical insurance through a contributory fund.