The High Court in Nairobi has thrown out a case filed by Standard Chartered Bank challenging the Retirement Benefits Tribunal’s order that required the lender to pay pensioners Sh30 billion.
The bank had claimed that it risked financial ruin if it was compelled to make the payout to 629 of its retired employees.
But Justice John Chigiti yesterday dismissed the case and slapped the lender with the costs of the suit.
“The application is hereby dismissed with costs,” ruled Justice Chigiti.
The retired employees first moved to court in 2018, demanding Sh14.9 billion arising from the conversion of their pension funds.
The Retirement Benefits Appeals Tribunal agreed with the pensioners that the bank’s pension fund used the wrong procedure in calculating their terminal dues, resulting in reduced dues. The tribunal ordered the lender to disclose to the 629 former employees lump sum benefits and the actuarial methods to be used to recalculate their retirement benefits.
Standard Chartered was ordered to factor in the cost of living adjustments, housing allowance and future increases and payments.
The lender alongside its trustees for the pension fund and staff benefit, however, sought the suspension of the tribunal’s verdict for a Sh30 billion settlement for its employees, some of whom retired way back in 1975.
The Retirement Benefits Tribunal ordered the lender to disclose to the 629 former employees lump sum benefits and the actuarial methods to be used to re-calculate their retirement benefits.
Standard Chartered was ordered to factor in the cost of living adjustments, housing allowance, and future increases and payments.
The tribunal ordered the Retirement Benefits Authority (RBA) to supervise the exercise and file a report within 60 days.
However, the bank argued that the tribunal overstretched its powers and allegedly included three computation methods that contradict each other.
“The ex-parte applicants are apprehensive that should this honourable court not grant them leave to commence judicial review proceedings as prayed and that should the said leave not operate as a stay of execution of the decision contained in the judgment of the first respondent dated Aril 28, 2022, not only will they be subjected to unnecessary computation without jurisdiction and without a forum to resolve any dispute that may arise in respect thereof, the first respondent being functus officio but will be exposed to a settlement of a claim which may be as well in excess of Sh30 billion,” court papers filed by the lender’s lawyers Oraro and Company Advocates read in part.
The bank made its application alongside David Gico Kamau, Walter Mungai, Azrakim Mudika, and Bartesh Shah. The five are the trustees of the first Standard Chartered Kenya Pension Fund (the first scheme).
Others who were in the case are David Gicho Njoroge, Jane Chege, Nicholas Otado, and Julius Mwangi, who are the trustees of the Standard Chartered Kenya Staff Benefits Scheme 2006 also known as the second scheme.
In the case, the lender’s retirement benefit scheme administrator Fred Waswa said the scheme was established in 1975 and was amended overtime with the last amendment on July 1, 2006.
The first scheme, he said, was established in 1975 and handed to trustees.
According to Waswa, the bank, with the sanction of the trustees of the first scheme established the contribution scheme, which would provide benefits based on the contribution of each member.
In 1999, the lender established a new scheme as a separate section of the first scheme. All new employees of the bank were eligible to join this scheme.