Employers will face a penalty of five per cent of the unremitted contributions or Sh20,000, whichever is higher, following amendments to the Retirement Benefits Act.
CEOs of the pension schemes who delay remitting audited reports to the regulator three months after the close of a fiscal year face a Sh100,000 fine and a further Sh1,000 for each day of delay.
Currently late submissions attract a Sh5,000 daily fine for the schemes until the day financials are submitted, with no penalty for the bosses.
Employers who fail or delay to remit pension deductions and contributions to pension schemes will face stiffer penalties from October.
They will face a penalty of five per cent of the unremitted contributions or Sh20,000, whichever is higher, following amendments to the Retirement Benefits Act
The chief executives of the pension schemes who delay remitting audited reports to the regulator three months after the close of a fiscal year face a Sh100,000 fine and a further Sh1,000 for each day of delay.
This is after Treasury secretary Henry Rotich, through the Finance Bill 2018, introduced amendments defining the reporting period for the retirement schemes effective October 2018.
Currently late submissions attract a Sh5,000 daily fine for the schemes until the day financials are submitted, with no penalty for the bosses.
The new requirement forcing retirement schemes to publicly publish financial reports and employers to ensure they make timely staff contributions is a fresh strategy to enhance transparency and integrity in Kenya’s Sh1 trillion pension industry.
Schemes are seen as largely opaque with many lagging in reporting, leaving pensioners and contributors suffering. Some rogue employers have also been on the spot for failing to remit statutory contributions of employees.
“A trustee who fails to submit a copy of the audited accounts of the scheme to the chief executive officer by the due date to pay a penalty of Sh100,000 and where the returns remain un-submitted, the trustee, in addition to the prescribed penalty, shall pay a further fine of Sh1,000 for each day or part thereof during which the return remain un-submitted,” reads the amendment to the Retirement Benefits Act.
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