Pensioners win Sh30 billion pay battle against Standard Chartered Bank

Standard Chartered Bank branch along Kenyatta Avenue in Nairobi. [File, Standard] 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 was likely to suffer massively if it footed the pension of the 629 employees. However, Justice John Chigiti has dismissed the case and slapped the lender with costs. "The application is hereby dismissed with costs," ruled Justice Chigiti. Standard Chartered Bank, alongside its trustees for the pension fund and staff benefit moved to court seeking the suspension of the tribunal's verdict that exposes it to 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 Standard Chartered lawyers, Oraro and Company Advocates, read. The lender 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 that 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. Waswa said that all members of the first scheme did not transfer their pension to the new defined contribution section. Instead, they remained in the first scheme with their benefits which had crystalized at the time they had left the bank. On July 1, 2006, the lender established the second scheme, Standard Chartered Kenya Staff Retirement Benefits Scheme. According to Waswa, upon the establishment of the second scheme, the first scheme became redundant. "The defined contribution section of the first scheme was deemed to have become redundant on the ground that it was incapable of taking any new members. Instead, all new eligible employees of the bank would effectively become members of the second scheme," said Waswa. He continued: "The first scheme, therefore, remained active only for the purposes of honouring its obligations to the existing pensioners and deferred pensioners." He stated that the claim in the case before the tribunal hinged on an argument that all 629 former employees attained normal retirement age. However, according to him, 111 of the 629 opted to retire in 1994 through its Voluntary Early Retirement Scheme. At the same time, he said, only 59 of the members joined the second scheme. "The employees of the bank who terminated their employment either by resignation or otherwise before the retirement age of 55 years and opted to receive a lump sum payment in lieu of their deferred pension or pension also joined the proceedings before the Retirement Benefit Tribunal," said Waswa. He claimed that 319 others had already received a lump sum payment. He claims that there were others who filed a case before the Employment and Labour Relations Court over the matter. "I believe the said appellants could not have a claim against the bank or the trustees," he said.

Pensioners win Sh30 billion pay battle against Standard Chartered Bank

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Pensioners win Sh30 billion pay battle against Standard Chartered Bank

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