Retirement Benefits Act

This Act may be cited as the Retirement Benefits Act.

Provides interpretations and definitions of terms used in the Act.

The Authority must pay members of the Board remuneration, fees or allowances for expenses, in consultation with the Cabinet Secretary.

The Board shall appoint a Chief Executive Officer (in consultation with the Cabinet Secretary) and determine the CEO’s terms; the CEO must have at least ten years' managerial experience in specified sectors; the CEO is an ex officio (non-voting) member and is responsible for day-to-day management subject to Board directions.

The Board must appoint a secretary to the Board; the Board may appoint officers or servants necessary to discharge the Authority's functions, on terms and conditions it determines.

The section provides that the Authority's common seal must be kept in custody as the Board directs, may not be used except by order of the Board, and that a duly authenticated seal on a document is judicially and officially noticed.

Members of the Board and officers, employees or agents of the Authority (and persons acting on their directions) are protected from personal liability for acts done bona fide in executing the Authority's functions, powers or duties.

The Authority must pay compensation or damages to any person for injury to them, their property, or their interests caused by exercising powers under this Act or other written law, or by partial or total failure of works.

The Cabinet Secretary may, in consultation with the Board and by order published in the Gazette, impose a Retirement Benefits Levy on scheme contributions, fund assets, or another base; unpaid levy amounts may be recovered by the Authority and a late addition of five per centum per month applies.

Establishes the Retirement Benefits Authority Fund and vests it in the Authority; lists sources of the Fund including levy proceeds, moneys/assets accruing to the Authority, payments, Cabinet Secretary grants, and other donations or loans; provides for Parliament-funded grants towards Board expenditure.

The Authority may invest its funds in approved securities or place unused moneys on deposit with banks it determines.

The Authority's financial year is the period of twelve months ending on the thirtieth June in each year.

The Board must prepare annual revenue and expenditure estimates before each financial year; after Board approval the Authority may not increase those estimates without the Cabinet Secretary's consent.

The Authority must keep full books and records of account; it must prepare statements of income and expenditure and of assets and liabilities for the year; the accounts must be audited by the Auditor‑General under the Public Audit Act.

Establishes the Retirement Benefits Authority and lists corporate powers including suing and being sued; acquiring, holding and disposing of property; borrowing and lending money; and performing other lawful corporate acts to further the Act.

The Authority must have its headquarters in Nairobi.

The Authority must regulate and supervise the establishment and management of retirement benefits schemes.

The section enables assistance in investigations and preserves the Authority's power to co-operate or co-ordinate with other regulatory bodies so long as that co-operation is not contrary to the Act's objectives.

The Authority may investigate and must in writing depute a qualified person to conduct investigations; a person who contravenes subsection (2) commits an offence.

The Cabinet Secretary must appoint a chairperson from among the members appointed under paragraph (f).

theBoard has the power to control, supervise and administer the assets of the Authority.

The Authority must regulate, supervise and enforce anti‑money laundering, counter‑terrorism financing and counter‑proliferation financing compliance for reporting institutions.

Certain persons in a scheme or scheme fund must not violate or fail to comply with anti-money laundering and terrorism financing regulations, with specified monetary penalties for legal persons, natural persons, and daily continuing breaches.

The conduct and regulation of the Board's business and affairs is provided in the Schedule; subject to that, the Board shall regulate its own procedure.

The Board may, by resolution, delegate any of the Authority's powers or functions to a committee or to any member, officer, employee or agent of the Authority.

Section 22 requires registration: persons must not establish a retirement benefits scheme except under this Act and must not act as manager, corporate trustee, custodian or administrator unless registered and holding a valid certificate; the Authority must publish a yearly list of registered managers, trustees, custodians and administrators.

The Authority must give a person an opportunity to be heard before determining whether they are fit and proper under this Act.

Persons proposing to establish a retirement benefits scheme or to act as a manager, corporate trustee, custodian or administrator must apply to the Authority and obtain a certificate of registration before establishing the scheme or commencing those functions.

A scheme may not be registered unless its trustees satisfy the requirements specified in section 26.

Defines 'Section' as a limited liability company, incorporated under the Companies Act (Cap. 486), limited by shares, and whose main object is to manage scheme funds.

Defines "Section" as a limited liability company incorporated under the Companies Act (Cap. 486) whose main function is to perform the functions of a custodian within the meaning of this Act.

Applicants for registration as scheme administrators must meet listed eligibility and capacity requirements (paragraphs (a)–(f), (ee), (eb)); registered administrators must comply with paragraph (eb) within six months of its commencement.

The Authority may prescribe the minimum paid-up share capital for corporate trustees.

Every scheme (other than one established by written law) must be established under an irrevocable trust, and the appointment of any person as a trustee is subject to approval by the Authority.

If the Authority refuses to register a scheme, manager, corporate trustee or custodian, it must forthwith notify the applicant in the prescribed form specifying the reasons for refusal.

The Authority may deregister schemes, managers, trustees, custodians or administrators on specified grounds; before deregistration it must give 28 days' notice to affected parties and consider written representations; the CEO may, with Board approval, take over distribution when assets are insufficient.

Section 29 sets rules on the duration of registration certificates and requires managers, corporate trustees, custodians and administrators to pay an annual fee, submit audited financial statements and specified information by 30th September each year, and notify the Authority of changes in shareholding, directorship or top management within thirty days.

The Chief Executive Officer must keep a register of all registered schemes, managers, corporate trustees, custodians and administrators and enter particulars specified by the Board; the Board may determine the register's form and when and to what extent members of the public may inspect or obtain copies on payment of the prescribed fee.

Register entries are prima facie evidence of the facts recorded; a document certified by the Chief Executive Officer as a true copy or extract from the register is admissible in court as prima facie evidence of the register's contents.

Scheme funds must be maintained separately by the trustees or the manager, and the Cabinet Secretary may make regulations (in consultation with the Authority) about scheme funds.

An employer may pay statutory contributions into a prescribed scheme fund with the approval of employees; if the payment transfers funds from another scheme fund the employer must give written notice to the Authority and trustees at least sixty days before starting.

Trustees must keep proper books and records, have annual accounts audited by an auditor approved by the Board (who must not be a member, trustee or sponsor), submit audited accounts to the Chief Executive Officer within three months after the end of each financial year, and specified penalties and daily fines apply for failure to submit; provisions also set penalties for fund managers and administrators for late returns and allow the Authority to extend the submission time by up to three months.

The Board may require trustees to have schemes evaluated by an actuary approved by the Board and to present actuarial reports to the Chief Executive Officer at intervals the Board specifies; trustees who fail to submit the report by the regulations' due date must pay KSh 100,000 and KSh 1,000 for each day it remains unsubmitted.

Contributions or funds of a scheme member or their employer do not form part of the member's or employer's assets in the event of bankruptcy.

When a scheme member dies, trustees must pay the scheme benefit in accordance with the scheme rules; the benefit does not form part of the member's estate for administration.

Schemes must adopt a prudent investment policy; small schemes (≤100,000,000 Kenya shillings) may invest up to 100% in Government securities; the Cabinet Secretary may make implementing regulations; schemes must submit statements of investments to the Chief Executive Officer; approved issuers must remove funds from guaranteed fund asset classes within 12 months after termination.

Limits certain uses of scheme funds; allows members to assign some benefits to secure a mortgage or buy a house; exempts funds set up for Sharia-compliant investing from guidelines; grants the Authority power to disqualify and later lift disqualification after at least five years upon application and fee.

The Chief Executive Officer may direct trustees, managers, custodians or administrators of a scheme in writing to stop unsafe or unsound practices; acting contrary to such a direction is an offence punishable by a fine up to five hundred thousand shillings or imprisonment up to two years, or both.

Trustees and managers must ensure that the scheme fund is at all times managed in accordance with this Act, any regulations made thereunder, the scheme rules and any directions given by the Chief Executive Officer.

The Chief Executive Officer may at any time and shall, if directed by the Board, cause an inspection by an inspector he authorises; managers, trustees, custodians or administrators and their officers must provide documents within seven days (or longer if the inspector directs); documents must not be removed during inspection; the inspector may copy documents.

Section 42 creates offences for obstructing inspectors, giving false information or failing to comply with inspector requirements, and prescribes fines, imprisonment for individuals, daily continuing-offence fines, and a power for the Authority to seek winding up of a convicted body corporate.

An inspector appointed under this Part must submit his report to the Chief Executive Officer; the report must draw attention to breaches of the Act or regulations, mismanagement or lack of management skills, and any other matters warranting remedial action or further investigation.

The Chief Executive Officer may, by notice in the prescribed form, require trustees, managers, custodians or administrators of an inspected scheme to comply with directions the Authority considers necessary, within any date or period specified.

The Authority may share information with other regulatory authorities.

The Chief Executive Officer may appoint an interim administrator with powers to manage a scheme where trustees fail in reporting, provide false information, or other circumstances warranting intervention; the interim administrator must manage the scheme diligently and perform specified tasks; appointment is for up to twelve months and may be extended by the High Court.

If, within two years after completion of winding up a scheme, the liquidator cannot trace a member, that member's accrued benefits become unclaimed assets under the Unclaimed Financial Assets Act.

Members of a scheme who are dissatisfied with a decision may in writing request the Chief Executive Officer to review that decision.

The Cabinet Secretary must, by order published in the Gazette, establish an Appeals Tribunal for hearing appeals under this Act; the Tribunal will have a chairperson and four members appointed by the Cabinet Secretary, who hold office for three years; the chairperson must be an advocate of the High Court of Kenya with at least seven years standing; the quorum is the chairperson and any two members; matters are decided by majority vote subject to the quorum rule.

A person aggrieved by a decision of the Authority or its Chief Executive Officer may appeal to the Tribunal within thirty days; where a dispute arises between a person and the Authority over the Authority's powers, either party may appeal to the Tribunal in a prescribed manner.

The Appeals Tribunal has the powers of a subordinate first-class court to summon witnesses, take evidence and call for documents; it may receive affidavit evidence and administer interrogatories; it may consider evidence otherwise inadmissible; it has power to award costs; and interested parties may be represented before it.

A person "refuses or fails to attend at the time and place mentioned in the summons served on him."

If the Tribunal awards costs, it must issue a certificate of the amount on application; that certificate may be filed in the High Court and, once filed, is deemed a High Court decree and may be executed.

The Chief Justice may make rules about how appeals are made, fees and costs, procedure and notifying parties.

Contravening an express offence provision or failing to comply with a CEO direction is an offence, but a person is not guilty if they prove lack of knowledge, consent or connivance and that they attempted to prevent it.

If an employer deducts money for a scheme but fails to remit it within 15 days, the scheme may (after giving at least seven days' notice) start recovery proceedings; the employer must pay the deducted sum within seven days of the notice; unpaid sums accrue compound interest at 3% per month; failure to comply with a notice is an offence punishable by a fine up to 500,000 shillings or, for a natural person, imprisonment up to 3 years, and continuing offences attract a further fine of 1,000 shillings per day.

Provides powers and procedures to recover unremitted contributions: employers must pay contributions, interest and a penalty within specified periods; Trustees may appoint the KRA with Authority approval; Trustees must request Authority approval in writing; the Authority must decide within 21 days; the KRA issues notices, can attach bank accounts and remit funds; recovery costs are borne by the defaulting employer.

Section 54 makes bodies corporate, certain directors or officers, partners or officers of partnerships, persons, and employers or principals liable for offences under the Act; employers or principals have a defence if they prove the offence was committed against their express or standing directions.

The Director of Public Prosecutions may appoint public prosecutors for cases arising under this Act; the Authority is deemed a public authority for purposes of the Criminal Procedure Code.

Section 55 allows the Cabinet Secretary, in consultation with the Authority, to make regulations to implement the Act and to prescribe matters listed in subsections (2)(a)–(g); it also allows the Authority to issue guidelines, practice notes or codes of conduct for administration of retirement benefits schemes.

The State Corporations Act (Cap. 446) does not apply to the Authority.

Persons who, at the commencement of the Act, are trustees or managers of a scheme to which the Act applies must apply for registration under the Act within sixty days of commencement or within a longer period prescribed by the Cabinet Secretary in consultation with the Authority; that prescribed period must not exceed three years.

If there is a conflict between this Act and any written law (other than the Constitution) about the Authority's powers or functions under this Act, the provisions of this Act prevail.

Allows exemption of any person or class of person from compliance with any specified provisions of this Act.