- The RBA had given large schemes up to June 2020 and the smaller ones up to June 2021 to comply with the guidelines.
- RBA chief executive Nzomo Mutuku said last week challenges posed by the Covid-19 pandemic since last year have affected some schemes’ ability to comply fully.
Nearly half of large pension schemes are yet to comply with good governance guidelines issued by the Retirements Benefits Authority (RBA), three years since the rules meant to protect the interests of members, their dependants and sponsors of the schemes were put in place.
The pensions regulator said that only 56 percent of the schemes have complied with the rules gazetted in August 2018 to guide the conduct and provide governance criteria for evaluation of trustees and service providers in pension schemes.
The RBA had given large schemes up to June 2020 and the smaller ones up to June 2021 to comply with the guidelines.
RBA chief executive Nzomo Mutuku said last week challenges posed by the Covid-19 pandemic since last year have affected some schemes’ ability to comply fully with the guidelines.
He added that the RBA is dealing with each scheme’s compliance on a case-by-case basis, given that the guidelines allow an extension of time for compliance.
“As of June 30, 2021, 62 percent (104 schemes out of the 168 large schemes with assets exceeding Sh5 billion) had submitted the good governance checklist to indicate their level of compliance,” said Mr Mutuku during a retirement benefits conference in Mombasa on July 21.
“Out of these schemes, only 56 percent of the schemes were compliant with the guidelines having met the threshold of 70 percent of the requirements in the guidelines.”
The rules stipulate among other things that the trustees of a scheme shall avoid and report conflicts of interest in dealings with the schemes, and also ensure that schemes do not engage in improper or unlawful activity, including money laundering and corruption.
They are also required to ensure that all members are fairly represented in the governance of schemes notwithstanding the size of their contributions.
These rules were introduced to streamline the management of schemes and protect members from losses arising from negligence by trustees and service providers.
The RBA also gazetted guidelines on fair treatment of customers, with a review set for the current fiscal year to gauge the level of compliance.
Two other guidelines on trustee remuneration policy and scheme expenses, and anti-money laundering and combating financing of terrorism are awaiting gazettement.