Capital Markets

Pension schemes chiefs face jail over late financial results

Acting RBA chief executive Nzomo Mutuku. PHOTO | DIANA NGILA | NMG
Acting RBA chief executive Nzomo Mutuku. PHOTO | DIANA NGILA | NMG 

Chief executives and trustees of 126 pension schemes whose fiscal years end in December could face a two-year jail term and a Sh500,000 fine for failing to file financial results with the industry regulator by the end of March.

Retirement Benefits Authority acting chief executive Nzomo Mutuku said only 975 pension schemes out of the total 1,101 with financial year ending December 31 had filed returns three months after the deadline.

The Finance Act 2016 introduced amendments offering a three-month window after the close of a financial year for retirement schemes to share their performance with RBA, effective January 2017.

Mr Mutuku was yet to provide a list of the 126 pension schemes whose results have delayed by the time of going to press or confirm if the regulator will be taking the funds’ bosses to court.

“Failure to submit audited accounts is an offence, and a trustee shall be liable on conviction to a fine not exceeding Sh500,000 and imprisonment to a term not exceeding two years,” he told Business Daily in an earlier interview.

The new requirement forcing retirement schemes to publish their financial reports is a fresh strategy to enhance transparency and integrity in Kenya’s Sh1 trillion pension industry.

Fresh changes to the Finance Act 2017 provide that bosses and administrators of laggard pension schemes further face a Sh100,000 fine for late filings of financial results to RBA and a further Sh1,000 for each day lapsed in the delay.

This new amendment set up laggard pension schemes for double punishment – one for failure to submit audited results and another for late submission of financials to the regulator.

State-backed NSSF released its financial statements for the period to June 2015 mid last year, and is yet to publish results for the year to June 2016.

Troubled Kenya Railways Staff Retirement Benefits Scheme’s February AGM to adopt financial statements for the year to June 2015 aborted as pensioners accused the administrators of looting their assets.