Retirement Benefits Authority of Kenya

WikiKenya Government regulatory bodiesRetirement Benefits Authority of Kenya
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The Retirement Benefits Authority (RBA) is a regulatory body established by the Government of Kenya to supervise the establishment and management of retirement benefits schemes in the Republic of Kenya.

Establishment

Prior to enactment of the Retirement Benefits Act, the retirement benefits sector in Kenya was regulated by fragmented legislation, mostly Trust and Income Tax Laws. Without a specific body or regulations to set industry standards, pension schemes adopted different styles of operation, leading to serious challenges in proper administration of the sector,

RBA was subsequently established by amendment of the Retirement Benefits Act in a bid to resolve the problem by centralizing the administration of the sector within a single entity.

Objectives

Retirement Benefits Authority is mandated to:

  • Protect the interest of members and sponsors of retirement Benefits schemes.
  • Advise the Government on matters relating to retirement benefits.
  • Develop and promote the retirement benefits sector.
  • Implement all Government policies relating to retirement benefits.
  • Regulate and supervise the establishment and management of retirement Benefits schemes.

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ADDRESS

Retirement Benefits Authority
Rahimtulla Tower, 13th Floor,
Upper Hill Road,
Opp UK High Commission.
P.O. Box 57733 – 00200
Nairobi, Kenya.

PHONE NUMBER

+254 (20) 2809000
Toll Free No: 0800720300
(Safaricom Network)

EMAIL ADDRESS

info@rba.go.ke

Types of Schemes

Defined Contribution and Defined Benefit

A defined contribution (DC) scheme is a scheme in which member’ and employer’ contributions are fixed either as a percentage of pensionable earnings or as a shilling amount, and a member’s retirement benefits has a value equal to those contributions, net of expenses including premiums paid for insurance of death or disability risks, accumulated in an individual account with investment return and any surpluses or deficits as determined by the trustees of the scheme.

DC Schemes are arrangements where the retirement benefit is not known or defined in advance. Rather the level of retirement income receivable on pay-out date is related to the:

  • level of contributions made over the accumulation period;
  • the charges deducted by the product provider;
  • the investment returns of the fund during the accumulation phase;

A defined benefit (DB) Scheme is an arrangement where the benefits, which is ordinarily determined by the scheme rules, are defined in advance. Benefits are often related to the final salary and/or years of service of the employee. 

DEFINED BENEFIT SCHEMESDEFINED CONTRIBUTION SCHEMES
EmployerEmployeeEmployerEmployee
Risk of investment performanceCertaiint of benefits (easy tomeasure benefits in terms of adequacy and better for retirement planning)Fixed costsFixed costs
Potential increase in cost (issue os sustainability)Solvency of employerNo risk of investment performanceRisk of investment performance
    

Hybrid Schemes seek to combine features of DB and DC schemes in some way and can take a variety of forms. For purposes of categorization, hybrid schemes are DB schemes because of the promises they make to members.

Provident Fund and Pension Fund

Provident fund means a scheme for the payment of lump sums and other similar benefits to employees when they leave employment or to the dependants of employees on the death of those employees.

In the case of a pension fund at the point of retiring a proportion of the retirement fund is commuted as lump sum with the remainder paid out as periodical payments.  The commuted amount will be equal to no more than one quarter of the retirement benefits in a scheme where members do not make any contributions and not more than one third of the retirement benefits in a scheme where members make contributions.

Occupational Scheme and Individual Scheme

INDIVIDUAL RETIREMENT BENEFITS SCHEMES REGISTERED WITH RBA

Umbrella Schemes in Kenya

NSSF

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