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Kenya: Treasury warns state corporations over non-remitted pension deductions

Kenya: Treasury warns state corporations over non-remitted pension deductions

Government warns state corporations over non-remitted pension deductions

By James Ratemo

State corporations that fail to promptly remit pension deductions shall be censured by government, National Treasury Cabinet Secretary, Henry Rotich has warned.

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Speaking during the launch of Retirement Benefits Authority’s 2019-2924 Strategic Plan, Mr. Rotich said affected state corporations shall henceforth be required to give top priority to pension arrears in their budget proposals.

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Pension deductions

“In the ongoing budget approval process for state corporations, The National Treasury shall require the corporations to give top priority to any pension contribution arrears,” Mr. Rotich said.

He said the National Treasury will censure state corporations that fail to remit pension deductions to their pension schemes in a timely manner as per the Finance Act 2018 which introduced penalties and other sanctions against employers who fail to remit contributions on time.

Pension deductions: Contributory Public Sector Superannuation Scheme

For the civil servants, Mr. Rotich said the Government is committed to commencing the contributory Public Sector Superannuation Scheme to tame the ballooning pension expenditure.

“This is a critical reform that is the only way to ensure sustainability of pension provision to civil servants in the long run. The on-going payroll cleanup through the Huduma Centres is expected to remove a large number of “ghost pensioners” from payroll,” said Mr. Rotich.

Mr. Rotich also revealed that the National Treasury is finalizing the National Retirement Benefits Policy to bring a harmonized framework for pension provision across the public and private sectors.

This will ensure that “Kenya’s pension system remains inclusive, adequate, affordable and sustainable.”

“I will be forwarding the draft National Retirement Benefits Policy to the Cabinet for consideration in the coming weeks,” said Mr. Rotich.

 

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