The Retirement Benefits Laws (Amendment) Bill, 2024
Status Timeline
Proposed
Active now
Public Review
Pending
Debate
Pending
Executive
Pending
Final
Pending
KRA Empowered to Issue Agency Notices to Third Parties
Under the proposed amendment to Section 53B of the Retirement Benefits Act (Cap. 197), if an employer fails to remit pension contributions, the KRA Commissioner can issue an 'agency notice' to any third party (such as a bank or debtor) holding money for the employer, requiring them to pay the unremitted amount, interest, and penalties directly to the KRA.
Personal Liability for Non-Compliant Third Parties
A third party who, without reasonable cause, fails to comply with an agency notice or a request to provide a financial return within 30 days will be held personally liable for the full amount specified in the agency notice.
Strict Timeline for Pension Fund Remittance
Once the Commissioner recovers unremitted funds from a third party, the KRA is obligated under Section 53B(7)(l) to remit those funds to the respective retirement benefits scheme within 30 days of receipt.
County Accounting Officers Held Accountable for Pension Obligations
The Bill amends Section 149 of the Public Finance Management Act (Cap. 412A), making it an explicit duty for county government accounting officers to comply with all tax, levy, duty, pension, and audit commitments.
Bill No.
Senate Bills No. 31
Gazette No.
Supplement No. 111 of 2024
Sponsor
Godfrey Osotsi
Background
Many retirement benefit schemes in Kenya face severe deficits due to employers, particularly county governments, failing to remit pension contributions. This Bill seeks to address this multi-billion shilling debt by empowering the Kenya Revenue Authority (KRA) with enhanced collection and enforcement capabilities to recover unremitted contributions, interest, and accrued penalties on behalf of pension schemes.
Key Amendments
- Retirement Benefits Act (Cap. 197): Amends Section 2 to define 'agency notice' and 'Commissioner', and amends Section 53B(7) to lay out the detailed statutory recovery process via third-party agents.
- Public Finance Management Act (Cap. 412A): Amends Section 149(2) to compel county government accounting officers to strictly comply with pension, tax, levy, duty, and audit commitments.
- Kenya Revenue Authority Act (Cap. 469): Amends the First Schedule (Part II) to include the Retirement Benefits Authority Act (Cap. 197) as a revenue law administered by the KRA.
New Obligations
- Third Parties: Any person or bank holding money for a defaulting employer must remit those funds to the KRA Commissioner upon receiving an agency notice. If unable to comply due to a lack of funds, the third party must notify the Commissioner in writing within 14 days.
- Financial Disclosures: The Commissioner may require any person to provide a return within 30 days detailing any monies held on behalf of a defaulting employer.
- KRA Remittance: The KRA must transfer any recovered pension funds to the respective scheme within 30 days of receipt.
Penalties
- Third-Party Personal Liability: A third party who fails to comply with an agency notice without reasonable cause shall be personally liable to pay the amount specified in the notice.
No updates tracked yet
Updates will be visible here once they are approved and applied to this bill.