The Retirement Benefits Authority (RBA) has urged all trustees, scheme administrators, and other service providers of retirement benefits schemes to pay the retirement benefits levy ahead of the October 31 deadline, or risk hefty fines.
In a notice issued on Tuesday, September 9, RBA called upon the retirement schemes to comply with the Constitution, which requires the schemes to pay the levy within four months after the end of the financial year.
Referencing June 30, 2025, as the end of the financial year, the Authority issued the vital reminder that directly impacts the security of pensions, warning of a hefty fine of five per cent per month on the outstanding amount.
“The Constitution of Kenya requires each scheme to pay to the Authority the Retirement Benefits Levy within four (4) months after the end of the financial year. Any default in the payment of the levy attracts a penalty of five per cent per month on any amount outstanding,” the notice read.
To streamline the process, the RBA has directed that all payments be made via the eCitizen platform, with confirmation emails sent to the authority to ensure compliance.
“Payments should be made online through the RBA Returns Portal via the eCitizen collection account. For all payments, please provide the scheme details, including the scheme registration number, scheme name, and amount of levy paid to the Authority, through RBA’s email address,” the Authority stated.
Failure to comply with regulations can lead to a reduced risk score for the scheme. Concerning how it affects pensioners, a poorly governed and non-compliant scheme poses a greater risk to the security of pension funds and could lead to delays or mismanagement of benefits in the future.
In Kenya, total assets under management (AUM) representing pension funds stood at Ksh2.25 trillion at the end of December 2024, emphasising the need to have a secure pension scheme.
This had represented an increase of 30.7 per cent from the Ksh1.7 trillion in December 2023, with the growth majorly attributed to the increase in contributions to the mandatory National Social Security Fund (NSSF) scheme.
At the same time, RBA directed the pension scheme providers to submit their audited financial statements to the Authority.
By law, the schemes are required to provide the statements within three months after the end of the financial year.
As such, the schemes were directed to provide the statements by September 30, 2025. This is a legal requirement under the Retirement Benefits Act, 1997, and failure to comply will result in significant penalties.
