Retirement Benefits Act Ammended to Allow Trustees to Appoint The Kenya Revenue Authority to Collect Unremitted Contributions
Pursuant to the Finance Act , 2021 , the Retirement Benefits Act , CAP 197 - has been amended to allow pension fund Trustees to engage the Kenya Revenue Authority ( KRA ) to assist in collecting unremitted contributions from sponsors who persistently default to remit the same to retirement benefits schemes .
In line with this , Section 53B ( 2 ), ( 3 ) ( 4 ) now reads as follows :
( 2 ) Where an employer has failed to remit the contributions , the Trustees may with the approval of the Authority , appoint the Kenya revenue Authority , as an agent , to collect unremitted have not made reasonable effort to recover unremitted contributions , interests and penalties , the Authority shall give a notice to the Trustees instructing them to appoint the Kenya Revenue Authority as an agent to recover the unremitted contributions , interests and penalties .
( 5 ) Upon appointment under subsection ( 2 ) or ( 5 ) the Kenya Revenue Authority shall issue a 21- day notice in writing to the defaulting employer requiring it to remit the unremitted contributions , interests , penalties and recovery costs .
( 6 ) Where an employer fails to comply with the notice , the Kenya Revenue Authority shall – contributions , interests , and penalties and the recovery costs .
( 3 ) Subject to subsection ( 2 ), the Trustees shall , in writing request the Authority for approval and shall demonstrate that they have taken all reasonable effort to recover unremitted contributions from a defaulting employer without any success .
( 3 ) The Authority shall either approve or reject the request in writing within 21 days from the date of receipt of the request .
( 4 ) Despite subsection ( 2 ), where the Authority is of the opinion that the Trustees have failed or a . Serve such employer with an agency notice ;
b . Attach the bank accounts of the defaulting employer ; and
c . Remit the attached funds to the Scheme .
( 6 ) The cost of the recovery of unremitted contributions shall be borne by the defaulting employer .
We believe that these amendments shall assist Trustees of retirement benefits scheme including our schemes , namely Laptrust and the County Pension Fund .
CPF Spotlight | Edition 02 6