PENSION PRESERVATION: ANNULMENT OF THE LEGAL NOTICE NO. 88 OF 2019

November 22, 2019

PENSION PRESERVATION: ANNULMENT OF THE LEGAL NOTICE NO. 88 OF 2019

Please note that effective 7th November 2019, Parliament annulled in its entirety Legal Notice No.88 of 2019 through which the Cabinet Secretary National Treasury had sought to amend Regulation 19, (5) of the Retirement Benefits (Occupational) Regulations to lock up 100% of the employer’s contributions until the contributor attains the age of retirement or on any of the grounds set out thereunder.

The said Legal Notice had also proposed to include a provision allowing for distribution of reserve funds to exiting members where the scheme maintains a reserve fund and  to limit the maximum reserve funds held by a scheme to five (5) percent of the total value of the scheme fund.

The effect of this annulment is that ALL the amendments carried in the Legal Notice have been invalidated and will not take effect.

For avoidance of doubt, the effect of the annulment on the preservation rule is that, where a member of a defined contribution scheme leaves employment before attaining the specified early retirement age, he/she may opt to access 100% of his own contributions and 50% of the employer contributions together with the investment income accrued in respect of those contributions.

It is however advisable that despite this provision, those changing jobs should delay accessing their pension contributions to ensure they have sufficient income in retirement.

Nzomo Mutuku, MBS

Chief Executive Officer,

Retirement Benefits Authority

 About the Retirement Benefits Authority

 The Retirement Benefits Authority is established under the Retirement Benefits Act, No. 3 of 1997 to regulate and supervise the establishment and management of retirement benefit schemes and to promote the development of the retirement benefits sector.

Media Contact

For more information or queries please contact:

James Ratemo,

Senior Corporate Communications Officer,

Retirement Benefits Authority

Email: jratemo@rba.go.ke

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