A Critical Analysis On The Role Of The Retirement Benefits Act And Regulations In Prevention Of Loss Of Retirement Benefits In The Occupational Pension Schemes
Retirement benefits schemes play a fundamental role in an economy as the driving force of savings towards retirement. Specifically, occupational pension schemes are a major source of retirement income for many Kenyans. Retirement benefits therefore have a big impact on the financial well-being of a retiring person, and a ‘wrong’ decision cannot be undone at a later stage as retirement benefits scheme members may be left without money after retirement. Financial insecurity is one of the main factors that lead to poverty in retirement, which is witnessed in Kenya today. The Retirement Benefits Act 1997 and Regulations have been amended severally since their enactment which has improved the protection of scheme member’s benefits. We are however seeing a few loopholes that need to be sealed in order for benefits held in occupational pension schemes to be completely protected. This study has shown that non-remittance of monthly contributions by employers, misappropriation of scheme assets by the trustees, loss of scheme funds through negligence of trustees and poor investment of the scheme assets, continue to be problems that need to be watched in order to avoid loss of members’ benefits under occupational pension schemes. The purpose of this study was to identify why occupational pension schemes are still encountering the aforementioned problems. Many factors were critically analyzed, including the weaknesses in the Retirement Benefits Act 1997 and it Regulations that have been exploited to an extent that scheme assets and funds have been affected negatively. The findings of the study revealed that the retirement benefits laws are not adequately equipped to avert the risks that lead to loss of retirement benefits. The study also reviewed certain shortfalls within the role of Retirement Benefits Authority (RBA). It was noted that RBA does not have sufficient powers to implement the current retirement benefits laws as well as protect benefits fully. The study revealed that retirement benefits directly affect the citizens’ well-being and life after retirement. When retirement benefits are well taken care of, they have the effect of reducing poverty during retirement as well as increasing the gross domestic product for countries.
The following license files are associated with this item: