The Retirement Benefits Authority (RBA) has published a reminder notice to trustees, scheme administrators, and other service providers of retirement benefits schemes.
The notice dated February 18 is about the filing of scheme accounts and payment of the retirement benefits levy.
RBA directed the announcement to schemes whose financial year ended on December 31, 2024.
Accordingly, RBA Section 34(4) of the Retirement Benefits Act, 1997 requires every scheme to submit to the Authority audited financial statements within three (3) months after the end of the financial year.
RBA also quoted Section 16 of the Act, Regulation 39 of the Retirement Benefits (Occupational Retirement Benefits Scheme) Regulations 2000; Regulation 32 of the Retirement Benefits (Individual Retirement Benefits Scheme) Regulations 2000 and Regulation 46 of the Retirement Benefits (Umbrella Retirement Benefits Scheme) Regulations 2017.
The above Regulations and Acts require each scheme to submit to the Authority the Retirement Benefits Levy within four months after the end of the financial year.
Also Read: Treasury Issues Another Notice to Pensioners & Dependants
RBA sets deadline
The Authority further said penalties apply for failure to submit audited accounts within the prescribed timelines as provided under Section 34 (4) (4c) of the Act.
“In this regard, schemes whose financial year ended on 31″ December 2024 should submit their financial statements by 31 March 2025 and pay the requisite levy by 30th April 2025.”
The Authority explained that any default in the payment of the levy attracts a penalty of 5 per cent monthly on any amount outstanding.
How to Pay
RBA emphasized that all payments must be made online through the RBA Returns Portal via the e-Citizen account.
“For all payments, please provide the scheme details including the e scheme registration number, scheme name and amount of levy paid to the Authority through the email address [email protected],” read the notice.
Retirement Levy
The retirement benefits levy is imposed under Section 16 of the Act and is payable as per the rates prescribed under Regulations forms and fees.
This levy helps support the administration and regulation of retirement benefit schemes in Kenya.
RBA annual levy are as follows:
1.Up to 500 million Kenyan Shillings: 0.2%.
2.More than 500 million but not exceeding 1,000 million Kenyan Shillings: 0.15%.
3.More than 1,000 million but not exceeding 5,000 million Kenyan Shillings: 0.1%.
4.More than 5,000 million Kenyan Shillings: 0.05%.
There are five different schemes under RBA including Defined Contribution and Defined Benefit, Provident Fund and Pension Fund, Occupational Scheme and Individual Scheme, Umbrella Scheme and the National Social Security Fund (NSSF).
New Tax Laws on Pensions & Retirement Benefits
In December 2024, RBA announced new tax reforms on pensions and retirement benefits which were introduced by the Tax Laws (Amendment) Act 2024, effective December 27, 2024.
RBA in a notice indicated that the changes would address current economic challenges by offering increased tax-free pension contribution limits among other changes.
“These reforms are designed to improve how retirement benefits are taxed and managed in Kenya, aligning with current economic challenges,” the statement read in part.
Also Read: Govt Introduces New Tax Laws on Pensions & Retirement Benefits
Key changes included an increase in the tax-free pension contribution limit by 50 per cent.
The tax-deductible contribution limit was also increased from Ksh240,000 annually (Ksh20,000 per month) to Ksh360,000 annually (Ksh30,000 per month).
At the same time, pension benefits from registered schemes were exempted from income tax if one reaches retirement age as per your scheme’s rules.
This also applies if you withdraw funds due to ill health before retirement age or have been a member for at least 20 years.
On the other hand, to address the critical need for healthcare in retirement, the Act introduced a tax-deductible limit of up to Ksh15,000 every month for contributions to post-retirement medical funds.
The Act further mandates that individual retirement funds, pension funds, and provident funds register exclusively with RBA.
Previously, retirement funds had to register with both the RBA and the Kenya Revenue Authority (KRA).
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