The Retirement Benefits (Individual Retirement Benefits Schemes) Regulations

Legal Notice 118 of 2000

This is the latest version of this Legal Notice.
Citation
Legal Notice 118 of 2000
Primary work
Retirement Benefits Act
Date
Language
English
Type
Legal Notice
Publication
Download PDF (4.5 MB)
Related documents
LAWS OF KENYA

RETIREMENT BENEFITS ACT

THE RETIREMENT BENEFITS (INDIVIDUAL RETIREMENT BENEFITS SCHEMES) REGULATIONS

LEGAL NOTICE 118 OF 2000

  • Published in Kenya Gazette Vol. CII—No. 64 on 13 October 2000
  • Commenced on 13 October 2000
  1. [Amended by Retirement Benefits (Individual Retirement Benefits Schemes) (Amendment) Regulations, 2002 (Legal Notice 99 of 2002) on 13 June 2002]
  2. [Amended by Retirement Benefits (Individual Retirement Benefits Schemes) (Amendment) Regulations, 2003 (Legal Notice 83 of 2003) on 20 June 2003]
  3. [Amended by Retirement Benefits (Individual Retirement benefits Schemes) (Amendment) Regulations, 2005 (Legal Notice 56 of 2005) on 10 June 2005]
  4. [Amended by Retirement Benefits (Individual Retirement Benefits Schemes)(Amendment) Regulations, 2006 (Legal Notice 62 of 2006) on 16 June 2006]
  5. [Amended by Retirement Benefits (Individual Retirement Benefits Schemes)(Amendment) Regulations, 2007 (Legal Notice 95 of 2007) on 15 June 2007]
  6. [Amended by Retirement Benefits (Individual Retirement Benefits Schemes)(Amendment) Regulations, 2008 (Legal Notice 75 of 2008) on 20 June 2008]
  7. [Amended by Retirement Benefits (Individual Retirement Benefits Schemes)(Amendment) Regulations, 2009 (Legal Notice 88 of 2009) on 12 June 2009]
  8. [Amended by Retirement Benefits (Individual Retirement Benefits Schemes)(Amendment) Regulations, 2011 (Legal Notice 12 of 2011) on 18 February 2011]
  9. [Amended by Retirement Benefits (Individual Retirement Benefits Schemes)(Amendment) Regulations, 2012 (Legal Notice 56 of 2012) on 15 June 2012]
  10. [Amended by Retirement Benefits (Individual Retirement Benefits Schemes)(Amendment) Regulations, 2016 (Legal Notice 99 of 2016) on 24 June 2016]
  11. [Amended by Retirement Benefits (Individual Retirement Benefits Schemes)(Amendment) Regulations, 2017 (Legal Notice 49 of 2017) on 7 April 2017]
  12. [Amended by Retirement Benefits (Individual Retirement Benefits Schemes)(Amendment) Regulations, 2018 (Legal Notice 144 of 2018) on 6 July 2018]
  13. [Amended by Retirement Benefits (Individual Retirement Benefits Schemes)(Amendment) Regulations, 2019 (Legal Notice 89 of 2019) on 21 June 2019]
  14. [Amended by Retirement Benefits (Individual Retirement Benefits Schemes) (Amendment) Regulations, 2021 (Legal Notice 163 of 2021) on 13 August 2021]
  15. [Amended by Retirement Benefits (Individual Retirement Benefits Schemes) (Amendment) Regulations, 2022 (Legal Notice 73 of 2022) on 27 May 2022]
  16. [Revised by 24th Annual Supplement (Legal Notice 221 of 2023) on 31 December 2022]

Part I – PRELIMINARY

1. Citation

These regulations may be cited as The Retirement Benefits (Individual Retirement Benefits Schemes) Regulations.

2. Application

These Regulations shall apply to individual retirement benefits schemes.

3. Interpretation

In these Regulations, unless the context otherwise interpretation requires—"administrator" means the person appointed under a written instrument by the trustees of a scheme to manage the administrative affairs of the scheme;"approved issuer" means an insurer registered under the Insurance Act (Cap. 487) or any other issuer approved in writing under the Capital Markets Authority Act (Cap. 485A) or under any other written law;"custodian" means a custodian registered by the Authority;"guaranteed fund" means an asset class—
(a)issued by an approved issuer, whereby the approved issuer, guarantees the accumulated capital of the scheme fund or pooled fund together with the investment income thereof in accordance with the terms of the guaranteed fund contract entered into between the approved issuer and the scheme or pooled fund;
(b)which is referred to as the Retirement Benefits Fund established as a statutory fund within the meaning of the provisions of the Insurance Act in which the capital of the scheme fund or pooled fund together with investment income thereof is guaranteed by the approved issuer in accordance with the terms of the policy of insurance issued to the scheme or pooled fund by the approved issuer.
"manager" means a manager registered by the Authority;"pooled fund" means a fund established by a limited liability company other than an approved issuer for purposes of pooling scheme funds for collective investment;"related company" in relation to a company means—
(a)its holding company or subsidiary;
(b)a subsidiary of its holding company;
(c)any person who controls it whether alone or with his associates or with other associates of the related company.
"scheme" means an individual retirement benefits scheme established for the benefit of individual beneficiaries for purposes of paying a retirement benefit;"scheme rules" means the trust deed and rules of the scheme;"trustees" means a trust corporation;"trust corporation" means a trust company incorporated under the Companies Act having a subscribed capital of not less than ten million shillings including unimpaired reserves which is for the time being empowered (by or under any written law, its charter, memorandum or association, deed of settlement or other instrument constituting it or defining its powers), to undertake trusts but for so long a time only as that body corporate shall not, by any prospectus, circular, advertisement or other documents issued by it or on its behalf, state or hold out that any liability attaches to the Public Trustee or to the Consolidated Fund in respect of any act or omission of that body corporate when acting as an executor or administrator;[L.N. 75/2008, r. 2.]

Part II – REGISTRATION OF A SCHEME

4. Registered office of a scheme

Every scheme shall have a registered office within the Republic of Kenya.

5. Application for registration of schemes

(1)An application for registration of an Individual Retirement Benefits Scheme shall be in the prescribed form.
(2)The Authority shall within ninety days from the date of receipt of an application for registration submitted under paragraph (1)—
(a)consider the application and notify the applicant in writing whether the scheme is acceptable for registration and the reason therefor if it is not acceptable; and
(b)proceed to register the scheme and forward to the applicant a certificate of registration in the prescribed form if the scheme is acceptable for registration.

6. Inspection of registers

A sponsor, member, trustee, administrator, manager, custodian or any other interested person may inspect the register maintained by the Authority of any scheme, manager or custodian and receive on written application a copy of the register upon payment of the prescribed fee.

Part III – ADMINISTRATION AND BENEFITS

7. Contents of scheme rules

Every scheme shall have rules which shall provide for the following:
(a)the full name of the scheme, including reference to any prior change of the name;
(b)the physical address of the registered office of the scheme;
(c)the date of commencement of the scheme;
(d)a list of definitions, in alphabetical order, defining the terms which are frequently used in the rules and which bear a special connotation;
(e)requirements for admission to membership into the scheme and the circumstances under which membership may cease;
(f)requirements under which an employer may remit contributions on behalf of the members;
(g)the appointment, term, removal from office, powers and remuneration of trustees;
(h)powers of investment of scheme funds;
(i)mode and method of remitting contributions;
(j)immediate vesting of contributions;Provided that where employment is on contract for a period not exceeding one year or less the vesting period in the case of the employer's contribution shall not exceed the term of the employee's contract of employment.
(k)conditions under which a member shall become entitled to and the mode of calculating his benefits;
(ka)the distribution of reserve funds to exiting members where the scheme maintains a reserve fund.
(kk)the normal retirement age of the members:Provided that the normal retirement age shall not be less than fifty years;
(l)custody of the scheme fund, title deeds and other securities belonging to the scheme;
(m)the appointment of the liquidator in case of a voluntary dissolution;
(n)the manner in which the scheme shall be dissolved subiect to the provisions of the Act and the regulations made thereunder;
(o)the manner in which contracts and other documents binding the scheme shall be executed;
(p)deleted by L.N. 56/2005, r. 2 (b);
(pp)the period within which a member who has attained a normal retirement age, or a member wishing to withdraw his benefits from the scheme shall be entitled to receive their lump sum benefits or to withdraw their benefits shall not exceed sixty days from the date of retirement or of giving notice or intention to withdraw such benefits as the case may be;
(q)the procedure of amending the rules;
(r)the appointment and term of the auditor of the scheme and other persons rendering professional services to the scheme;
(s)the manner in which disputes between the parties of a scheme shall be solved; and
(t)such other matters as the Authority may approve.
[L.N. 99/2002, r. 2, L.N. 56/2005, r. 2, L.N. 95/2007, r. 2, L.N. 89/2019, r. 2, L.N. 163/2021, r. 2.]

8. Amendment of scheme rules

(1)A scheme may amend its rules, but no such amendment shall be valid—
(a)if it purports to invalidate or reduce the rights of a member of the scheme;
(b)if it purports to affect any right of a creditor of the scheme, other than as a member thereof;
(c)unless it has been approved by the Authority and registered as specified in paragraph (3).
(2)Within thirty days from the date of the passing of a resolution for the amendment of the scheme rules a copy of such resolution and amendment shall be transmitted by the trustees to the Authority for registration:Provided that if any such amendment affects the financial position of the scheme, the trustees shall transmit to the Authority a certificate signed by an actuary.
(3)If the Authority finds that any such amendment is consistent with the Act, and is satisfied that the financial soundness of the scheme will not be affected by the amendment, it shall register the amendment and return the copy of the resolution to the trustees with the date of registration endorsed thereon, and such amendment, shall be deemed to take effect as from the date determined by the scheme concerned, or, if no date has been so determined, from the date of registration.

9. Duties of trustees

(1)The scheme rules shall make provision for—
(a)the manner of appointment of trustees and their term of office;
(b)the functions, powers and duties of the trustees which shall include the general supervision and administration of the scheme;
(c)the procedure of and grounds for the removal from office of trustees;
(d)the procedure for convening meetings of the scheme.
(2)The duties of the trustees shall include—
(i)Administering the scheme in accordance with the provisions of the Act, these regulations and scheme rules;
(ii)Keeping all proper books and records of account with respect to income, expenditure, liabilities and assets of the scheme fund;
(iii)Computing and preparing statements of payments of benefits to members;
(iv)liasing with the Authority, sponsors, members, manager, custodian and any other professional engaged by the scheme;
(v)collecting, keeping and updating retirement benefits data of each member including maintenance of individual membership records;
(vi)ensuring that the agreed contributions have been remitted to the custodian as required by the Act, these regulations and the scheme rules;
(vii)communicating regularly with the members of the scheme with respect to the affairs of the scheme;
(viii)providing members with annual membership benefits statements;
(ix)convening an annual meeting of members to enable them raise any matters pertaining to their schemes; and
(x)ensuring that documents intended to bind the scheme are professionally prepared.
(3)The trustees of a scheme shall be a trust corporation which shall be appointed under a deed and which shall have at least one director vetted by the Authority.
(4)Notwithstanding paragraph (3), a scheme shall not appoint a trust corporation whose ownership or directorship is related to that of its sponsor to be the trustee of the scheme.
(4A)A trust corporation shall not appoint an administrator, fund manager, custodian or approved issuer who is related to the trust corporation by way of ownership, directorship or employment.
(5)A trustee shall not be victimized, removed from office of trustee or discriminated against for having performed the functions of office in accordance with the Trust Deed and Rules of a Scheme or any law, without due process of the law.
(6)No trustee engaged in any profession or business shall be engaged in professional services done by him or his firm in connection to the scheme.[L.N. 99/2002, r. 3, L.N. 75/2008, r. 3, L.N. 56/2012, r. 2, L.N. 99/2016, r. 2, L.N. 144/2018, r. 2, L.N. 163/2021, r. 3.]

10. Effect of notice to transfer benefits

Where a member of a scheme gives notice to the scheme of intention to transfer benefits the scheme shall within sixty days from the date of the notice transfer to another scheme specified in writing by such member all benefits of such member:Provided that a member opting to transfer his benefits from the scheme shall not be penalised financially or otherwise by such scheme.

11. Rules relating to administrators

(1)The scheme rules may provide for the appointment, functions, powers, duties, remuneration and removal from office of an administrator, who may sit in attendance at all meetings of the board of trustees.
(2)
(a)The instrument appointing the administrator shall—
(i)make provision for the computation of the administrator's fees;
(ii)make provision for the extent of the rights and obligations of the administrator to the trustees.
(b)The administrative costs of a scheme debited to the scheme fund shall not exceed the budget approved by the trustees for that purpose.
(c)The Authority may if it deems appropriate require the scheme to avail its annual administration budget to the Authority.
(3)Where the administrator is for any reason unable to discharge any duties imposed upon him by these regulations or the scheme rules or any other instrument, an acting administrator shall be appointed.
(4)The trustees of the scheme shall notify the Authority of the details and qualifications of the person administering the scheme.

12. No penalty clauses in agreements

An agreement between a scheme and the pooled fund, or custodian or manager shall not include a clause whose purpose and intent is to penalise a scheme financially or otherwise where such scheme terminates the agreement.

13. Rules relating to a pooled fund

(1)The scheme rules may provide for the appointment, functions, powers, duties and termination of appointment of a pooled fund for purposes of investment and custody of the scheme fund.
(2)The instrument appointing the pooled fund shall make provision for the rights and obligations of the pooled fund to the trustees.
(3)A scheme authorized by its scheme rules to appoint a pooled fund may under a written instrument appoint a pooled fund whose duties shall include—
(a)receiving and accounting for the scheme fund in the pooled fund;
(b)keeping or causing to be kept such books, records and statements as may be necessary to give a complete record of—
(i)the value of a scheme fund in the pooled fund;
(ii)the investment transactions in respect of the pooled fund carried out by the custodian as instructed by the manager and shall permit, subject to notice, the scheme or any duly authorized agent to inspect within the premises of the pooled fund such books, records and statements at any time during business hours.
(c)submitting to the scheme within a period of three months from the end of the financial year the audited accounts of the pooled fund;
(d)notifying the scheme immediately of the particulars of the manager and custodian of the pooled fund as may be sought by the scheme which particulars shall include—
(i)the full name of the manager and custodian;
(ii)the physical and postal address of the registered office of the manager and custodian;
(iii)the dates of the first and subsequent financial years of the manager and custodian;
(iv)the contents of an agreement between the pooled fund and the manager and custodian; and
(v)any other particulars the scheme may deem appropriate to request from the pooled fund.
(e)submitting to the scheme at least quarterly from the date of commencement of the financial year of the scheme—
(i)a valuation of the scheme fund in the pooled fund;
(ii)a report reviewing the investment activity and performance of the investment portfolios comprising the pooled fund since the last report date and containing the manager's proposals for the investment of the pooled fund;
(iii)a record of all investment transactions of the pooled fund during the previous period.
(f)issuing proper instructions as provided for in the agreement with the custodian and manager;
(g)providing to the scheme a copy of the most recent audited financial statements of the manager and custodian with such information as may be sought by the scheme;
(h)exercising the same standard of care that it exercises over its own assets in fulfilling any other obligation in the agreement:
Provided that the pooled fund shall exercise the degree of care expected of a prudent professional in the respective business for hire.
(4)All monetary benefits, commissions or gains arising directly or indirectly out of the pooling of the scheme funds shall be credited to the pooled fund account.
(5)An agreement between a scheme and a pooled fund shall make provision for the computation of fees in respect of the pooling services.
(6)In the event of termination of the agreement referred to in paragraph (2) hereof, the pooled fund shall within ninety days from the date of termination, hand-over, transfer and deliver to a manager or another pooled fund appointed in writing by the scheme—
(a)the funds representing the value of the scheme fund in a pooled fund which shall be equal to the market value, at the time of transfer, of the scheme fund invested in the pool plus a proportionate share of all accrued investment income, commissions, fees and direct and indirect gains from investing the pool fund less the proportionate share of all accrued investment income, commissions, fees and direct and indirect gains from investing the pool fund less the proportionate share pre-agreed professional fee due to the pooled account:Provided that, where the liquidation of assets of the pooled fund may lead to adverse financial loss, the pooled fund and the scheme may negotiate an in-specie transfer of assets to the scheme at arms length market values;
(b)the statements pertaining to the entire scheme fund; and
(c)any other information as may be reasonably required by the scheme.
(7)Trustees shall jointly and severally be liable for any appointment of the pooled fund that does not meet the qualifications and requirements set out for pooled funds in these Regulations.

14. Qualifications of a pooled fund

(1)In determining whether a pooled fund qualifies to be appointed by a scheme for the purpose of investing scheme funds, a scheme shall consider whether a pooled fund—
(a)is established by a limited liability company with a minimum paid up share capital of ten million shillings;
(b)has—
(i)the professional and technical capacity and adequate operational systems to manage a pooled fund; and
(ii)developed a prudent investment policy for the investment of pooled funds.
(2)A scheme shall not appoint a pooled fund unless such pooled fund consists only of scheme funds maintained separately at all times from any other funds under the control of the pooled fund.
(3)A scheme shall ensure that a pooled fund keeps causes to be kept a designated account for the scheme fund of such scheme in the pooled fund.

15. Record of contributions

(1)Every scheme shall maintain or cause to be maintained a quarterly record of contributions in the prescribed form and the original record shall be submitted to the Authority by the fifteenth day of the month following the end of the quarter.
(1A)A scheme shall allow for additional voluntary contributions by a member in respect of funding of a medical fund to be accessed at retirement:Provided that the funds shall be segregated and invested as per the investment policy of the fund for this purpose.
(1B)The scheme rules shall provide that a member may transfer a portion of the member's benefits to a medical cover provider where the member has been unable to build a sufficient post-retirement medical fund from additional contributions.
(2)The quarterly record provided for in paragraph (1) may be delivered to the Authority by electronic mail or facsimile.
(3)Scheme funds including the title deeds, securities and income that shall accrue thereof, shall at all times be held and maintained in custody by a custodian on behalf of the trustees or the pooled fund.
(4)Notwithstanding the provisions of paragraph (3) where scheme funds or pooled funds are invested fully in guaranteed funds, the only asset of such funds shall be the guaranteed fund contract or the policy of insurance and such asset shall be held and maintained in custody by a custodian on behalf of the trustees or the pooled fund.
(5)Contributions payable in respect of a member shall be paid directly to the custodian on the dates specified in the scheme rules and the custodian shall, not later than the first business day following the day on which the custodian receives the contributions, deposit the contributions in an account with a bank duly registered under the Banking Act (Cap. 488) and such account shall be maintained by the custodian on behalf of and in the name of the scheme or pooled fund:Provided that in cases where a scheme, or pooled fund has invested its scheme funds fully in guaranteed funds, contributions may be paid directly to the approved issuer.[L.N. 49/2017, r. 2, L.N. 144/2018, r. 3.]

16. Benefits from the scheme

(1)The scheme rules shall specify the amount of every benefit payable by the scheme and the manner in which such benefit is calculated.
(2)The scheme rules shall provide that—
(a)where a member of an occupational retirement benefits scheme leaves employment before attaining the specified retirement age and transfers his accrued retirement benefits to an individual retirement benefits scheme, that member may opt for payment of not more than fifty per cent of his total accrued benefits and the investments income that has accrued in respect of those contributions.
(b)A member may opt for payment to him of the total amount of the vested accrued benefits before attaining the retirement age—
(i)on grounds of ill health or subsequently during deferment, if the member becomes incapacitated due to ill health, to the extent that it would occasion his retirement, if he was in employment; or
(ii)if the member has emigrated from Kenya to another country without the intention of returning to reside in Kenya and the trustees have approved the payment of the retirement benefits and submitted, fourteen days prior to payment of benefits, the approval to the Authority.
[L.N. 56/2005, r. 4, L.N. 62/2006, r. 2, L.N. 95/2007, r. 4, L.N. 12/2011, r. 2, L.N. 163/2021, r. 4.]

16A. [Deleted by L.N. 95/2007, r. 5.]

17. Access to pension benefits

The scheme rules shall provide that—
(a)where an employer makes contributions on behalf of an employee, the benefits shall vest immediately;
(b)where the employee leaves employment before attaining the retirement age, that employee shall not be entitled to more than fifty per cent of his total accrued benefits and the investment income that has accrued in respect of those contributions; and
(c)where a member makes his own contributions to the scheme, the member may opt for payment of the member’s total accrued benefits and the investment income that accrued in respect of those contributions.
[L.N. 83/2003, r. 6, L.N. 95/2007, r. 6, L.N. 163/2021, r. 5.]

18. Non-assignability of benefits

The scheme rules shall provide that no benefits or contributions accruing or payable thereunder shall be capable of assignment.

19. Payments of benefits to a nominated beneficiary

The scheme rules shall provide that on the death of a member the lump sum benefits payable from the scheme shall be paid to the nominated beneficiary, and if the deceased member had not named a beneficiary then the trustees shall exercise their discretion in the distribution of the benefits to the dependants of the deceased member:Provided that the trustees may refuse to pay the nominated beneficiary and furnish reasons for the refusal which reasons shall be recorded.

20. Constitution of scheme fund

Contributions by or on behalf of a member together with interest and other accrued income thereon shall constitute the scheme fund and it shall vest in a member immediately.[L.N. 99/2016, r. 3]

Part IV – FINANCIAL PROVISIONS AND STATEMENTS

21. Schemes to keep books and accounts

(1)Trustees shall keep and maintain such books of accounts and other records as may be necessary for the purpose of accounting for the assets and liabilities of the scheme.
(2)A scheme shall where applicable cause to be kept such records wherein an account of every member and individual scheme shall be maintained and all transactions in respect of each member and individual scheme shall be duly recorded.

22. Appointment of auditors

(1)Trustees shall within three months from the date of registration of the scheme appoint an auditor who shall be a member of the Institute of Certified Public Accountants of Kenya and the appointment shall be notified to the Authority within thirty days from the date of appointment for approval.
(2)Where the Authority refuses to approve the appointment of an auditor appointed under paragraph (1) or revokes its approval of an auditor, the auditor shall vacate office as an auditor of the scheme and the trustees shall appoint another auditor subject to approval by the Authority.

23. Annual accounts

(1)Trustees shall submit audited accounts including the trustees' and investments reports to the Authority together with a certificate signed by the trustees that to the best of their knowledge and belief the information furnished to the auditor for the purpose of audit is correct and complete in every respect.
(2)The income and expenditure account and the statement of assets and liabilities of the scheme shall be prepared in an accrual basis in the prescribed form and the annual accounts shall be accompanied by a report signed by the auditor of the scheme fund, and where the auditor signs the report with a qualification, the report shall disclose reasons for such qualification.
(3)Trustees shall within thirty days from the end of each financial year—
(a)conspicuously display in the office of the scheme a notice notifying the members that the audited accounts together with the trustees' and investments reports are available for inspection; and
(b)send to the members a summary of its audited accounts together with the members' benefit statements.
[L.N. 73/2022, r. 2.]

24. Accounting procedure for investments

The statement of income and expenditure of the scheme shall be credited with income receivable, the profits arising from sale of investment and any other receivable income.

25. Valuation of assets

(1)In this regulation, "net realizable value" means the value which an asset or investment can realise upon disposal at an arms length transaction less expenses payable to effect the disposal.
(2)For the purposes of these Regulations, assets of the scheme shall be valued at values not exceeding their market or net realizable value and in particular—
(a)the value of the land and buildings shall not exceed the value determined on the basis of a valuation by a registered valuer who is a member of the Institute of Surveyors of Kenya once in every three years or at such shorter intervals as the Authority may otherwise permit in writing;
(b)where the market value of any security, share or other investment is not ascertainable, only such value, if any, shall be taken into account as is considered reasonable, having regard to the financial position of the issuing concern, the dividend paid by it during the preceding five years and other relevant factors.

26. Actuarial valuation

(1)A scheme which has created and maintained a reserve fund shall, at least once after every five years from the date of registration, be valued by an actuary in the prescribed form and submit a copy of the valuation report to the Authority within five months from the end of the financial year:Provided that a scheme shall not create and maintain a reserve fund exceeding five per centum of the total value of the scheme fund.
(2)Trustees shall prepare a certificate in the prescribed form which shall form part of the actuarial valuation report stating that they furnished the actuary with correct and complete information in every material respect for the purposes of the actuarial valuation.
(3)Notwithstanding anything contained in paragraph (1), the Authority may by notice require a scheme to be valued at the cost of such scheme by an actuary any time in respect of any matter the Authority may deem appropriate and such valuation shall be in the prescribed form:Provided that if the scheme provides explicit guarantees to members an actuarial valuation shall be carried out every three years as if the scheme were a defined benefit scheme.[L.N. 56/2005, r. 3.]

27. Repair and maintenance of investments

Repair and maintenance expenses in respect of investments shall be charged to income during the year the expense is incurred and if the repair costs are in the opinion of trustees material, the Authority may grant approval for it to be amortised over several financial years but which period shall not exceed three years.

28. Minimum disclosure requirements

The financial statements of a scheme, shall be in the prescribed form and shall disclose—
(a)unremitted contributions;
(b)fees and expenses appropriately classified paid directly or indirectly to, or on behalf of the trustees;
(c)returns on investments as per each category of investment;
(ca)the net rate of return credited to the member's account;
(d)related party transaction;
(e)ownership of more than ten per centum equity in any one company or related companies; and
(f)any other matter as may be prescribed by the Authority.
[L.N. 73/2022, r. 3.]

29. Protection against financial loss

The scheme rules may provide for the protection of the scheme fund and assets against any manner of insurable risk and financial loss arising out of any negligence, default or wilful default on the part of any of its officers, trustees, administrator, manager or custodian either by way of a guarantee from the sponsor or by way of insurance of such amount as the trustees may deem adequate.

Part V – INVESTMENT GUIDELINES

30. Investment policy

(1)A scheme and a pooled fund, shall prepare and maintain, and after every three years revise a written statement of the principles governing decisions on investments for the purposes of the scheme or the pooled fund.
(2)The statement shall cover, among other things—
(a)the policy of the scheme, or the pooled fund, in compliance with regulation 31;
(b)the policy of the scheme or the pooled fund in the following matters—
(i)the categories of investments to be held;
(ii)risk;
(c)the realisation of investments; and
(d)such other matters as may be prescribed from time to time by the Authority.
(3)Neither the scheme nor the statement of principles governing decisions on investments of the scheme fund, or pooled fund, shall impose restrictions on any power to make investments by reference to the consent of the sponsor.
(4)A scheme shall before a statement under this regulation is prepared or revised obtain and consider the written advice of a professional investment advisor or a certified investment and financial analyst registered under the Investment and Financial Analysts Act (Cap. 542).
(5)A scheme shall consider the latest actuarial report when determining the principles governing decisions on investments for the purposes of the scheme.
(6)Where in the case of a scheme, or a pooled fund—
(a)a statement under this section has not been prepared or is not being maintained; or
(b)the trustees of a scheme whose funds are not part of a pooled fund or the pooled fund have not obtained and considered advice from a manager, the Authority may remove any trustee of such scheme from being a trustee or disqualify a pooled fund from pooling scheme funds.
(7)The scheme funds shall not be invested in assets that shall defeat the right of a member in the event such member chooses to transfer his or its benefits respectively to another scheme specified in writing.[L.N. 73/2022, r. 4.]

31. Investment guidelines

(1)Notwithstanding the provisions of regulation 30, a scheme, or pooled fund, shall invest only in an asset class referred to in column 1 of form G as prescribed to the extent to which the market value of the investment in the class expressed as a percentage of the total assets of the scheme or pooled fund does not exceed the percentage listed in column 2 of form G as prescribed in respect of such asset.Provided that—
(a)a scheme, or pooled fund, may exceed the maximum percentage indicated in column 2 in the event of an increase in the market price of assets, bonus issues or transfer of investment from one class of assets to another but any such excess shall not continue for a period of more than ninety days;
(b)a scheme, or pooled fund, may exceed the maximum percentage indicated in column 2 in the event of revaluation of real property but any such excess shall be reported immediately to the Authority together with an action plan as to how the trustees intend to return the scheme into compliance and the Authority shall within thirty days of receipt of the action plan advise the scheme in writing if the plan is acceptable or require the scheme to implement the plan subject to such terms and conditions as the Authority may deem appropriate;
(c)the maximum investment in the quoted equity of any one company shall be thirty per centum of the aggregate market value of the total assets of the scheme or pooled fund;
(d)the maximum investment in the quoted equity, unquoted equity, commercial paper loan stock and debenture issued by a company controlled by or a related company of the sponsor shall be three per centum of the aggregate market value of the total assets of the scheme; and
(e)Investments in the category "any other asset" shall be subject to the prior written approval of the Authority which shall be given or denied by the Authority within thirty days of application by a scheme.
(2)Any portion of a scheme fund which is not invested through a pooled fund or invested in guaranteed funds issued by an approved issuer for the purposes of this regulation may be treated as the aggregate market value of total assets of the scheme and be invested without regard to the portion of the scheme fund invested through a pooled fund or guaranteed fund:Provided that the prescribed investment guidelines shall not apply to the approved issuer with regard to the investment of guaranteed funds.[L.N. 99/2002, r. 4.]

Part VI – LEVY

32. Retirement Benefits Levy

(1)Every scheme shall within four months after the end of its financial year remit a levy to the Authority.
(2)The levy shall be payable in Kenya Shilling denominated crossed cheque, bankers draft or electronic money transfer and acknowledged by the issuance of an official receipt of the Authority.
(3)The basis of the annual levy shall be a percentage of the net asset value of the total scheme fund indicated in column 2 of form L as prescribed corresponding to the category in column 1, which includes the total value of the scheme fund.Provided that:
(a)the value of the scheme fund to be used in determining the levy shall be the total fund value indicated in the latest audited accounts of the scheme less the amount of the medical fund;
(b)notwithstanding anything contained in this regulation, the levy payable to the Authority per annum shall be a minimum of two thousand shillings and a maximum of five million shillings.
[L.N. 99/2002, r. 5, L.N. 56/2005, r. 5, L.N. 88/2009, r. 2, L.N. 144/2018, r. 4.]
▲ To the top

History of this document

31 December 2022 this version
27 May 2022
Read this version
13 August 2021
Read this version
21 June 2019
Read this version
06 July 2018
Read this version
07 April 2017
Read this version
24 June 2016
Read this version
15 June 2012
Read this version
18 February 2011
Read this version
12 June 2009
Read this version
20 June 2008
Read this version
15 June 2007
Read this version
16 June 2006
Read this version
10 June 2005
Read this version
20 June 2003
Read this version
13 June 2002
Read this version
13 October 2000
Commenced
Read this version