Many workers in the public sector deny themselves some of their earnings in an effort to secure their lives in retirement. This is a major sacrifice that should be respected and the organisations entrusted with the money should wisely invest it to boost the members’ kitties.
It is, therefore, shocking to hear about the huge sums of money that some employers deduct from their workers’ salaries but fail to remit it to their respective pension schemes.
The unremitted funds have hit a staggering Sh41.8 billion. This is terrible news for the employees who have been putting in their shift at work sure that they will have a cushion in retirement that will enable them to sit back and relax after working so hard over the years.
According to the Retirement Benefits Authority (RBA), most of the culprits are quasi-government institutions, including public universities.
By September 2020, pension schemes had not received a total of Sh35 billion from these employers and, by last June, the amount had risen to nearly Sh42 billion.
Pension backlog crisis
The RBA has conceded that this is a matter of serious concern. Those who retire today will find themselves having to wait for too long to get their dues paid and yet they will have no regular source of income as their salary payments cease.
Of course, this is nothing new. A recent amendment to the Retirement Benefits Act empowered the Kenya Revenue Authority to attach the assets of employers who deduct but fail to remit their workers’ monthly pension contributions.
The law is in place but the defaulters are yet to pay up. For instance, one public university owes its staff Sh5.5 billion and one cannot see how this and other cash-strapped public institutions will be able to make good their obligation.
It is, however, encouraging to note the RBA is working with the government to resolve the matter. This calls for more comprehensive consultations at the highest level in the government to unlock the pension backlog crisis.
In the meantime, however, the employers must be compelled to regularly remit the current deductions within the deadlines.
