Sh100,000 fine for pension admins in RBA changes

The Retirements Benefits Authority (RBA) will now slap pension fund managers and administrators with a Sh100,000 for late submission of their audited financials statements.

The regulator in proposed amendments to the RBA Act also wants pension funds for public entities not to be categorised as public funds.

For such, the authority is seeking an amendment to the Public Procurement and Asset Disposal Act that lists pension funds among public funds.

These changes are among proposals by RBA currently being subjected to public participation.

The regulator says while the RBA Act offers perpetual licensing of service providers in the sector, the majority of service providers have not been meeting the September 30 deadline when it comes to submitting their financials as stipulated in the law.

Apart from audited financial statements, the authority also needs to be furnished with the service provider’s ="https://www.standardmedia.co.ke/business/article/2001506555/new-team-to-probe-pension-billions-owed-by-counties">leadership structure<.Section 29 (2) of the RBA Act states that a certificate issued to a manager, corporate trustee, custodian or administrator shall be valid unless suspended or revoked.

“A manager, corporate trustee, custodian or administrator shall submit current audited financial statements, a list of directors and top management, any changes in clientele and such further information as the Authority may request by September 30 of every year,” reads Section 29 (4) of the RBA Act.

In the latest proposals, RBA seeks to penalise officials who submit these requirements late.

“Insert the following new paragraph after Section 29 (4) of the RBA Act 4(A) A manager, corporate trustee, custodian or administrator who fails to meet the requirements under parts (3) and (4) above by September 30, every year shall pay a penalty of one hundred thousand shillings and where any requirement remains due, the entity, in addition to the prescribed penalty, shall pay a further fine of one thousand shillings for each day or part thereof during which the requirement remains due,” reads the proposals.

RBA says the requirement to submit the stipulated documents is meant to aid the authority to investigate whether the service providers still meet the requirements for licensing.

“Regrettably, the majority of the service providers fail to meet these requirements within the stipulated timeline, which compromises the efficiency and timeliness of interventions by the Authority where there is a breach,” says RBA in the proposals.

The introduction of penalties for ="https://www.standardmedia.co.ke/politics/article/2001494957/ex-civil-servants-to-earn-more-if-mps-pass-changes-to-pensions-law">failure to meet the requirements< within the set timelines, says the authority, will act as a deterrent for non-compliance.

This will increase the ability of the authority to undertake timely interventions and reduce regulatory resources employed in tracking compliance.

The proposed changes further seek an amendment to Section 2(o) of the Public Procurement and Asset Disposal Act on the grounds that pension funds are not public funds.

Section 2(o) of the Public Procurement and Asset Disposal Act includes a pension fund for a public entity in the ="https://www.standardmedia.co.ke/business/article/2001477583/property-rich-pension-funds-experience-cash-flow-problems">definition of a public entity<. The proposed changes want this deleted from the Act.

RBA argues that pension funds worldwide are not regarded as public funds and do not fall under public procurement laws.