An Act of Parliament to establish a
Retirement Benefits Authority for the regulation, supervision and
promotion of retirement benefits schemes, the development of the
retirement benefits sector and for connected purposes
ENACTED by the Parliament of Kenya
as follows:
PART
1 - PRELIMINARY
1. Short title and
commencement. This Act may be cited as the
Retirement Benefits Act. 1997. and shall come into operation on
such date as the Minister may, by notice in the Gazette, appoint
and different dates may be appointed for different provisions.
2. Interpretation. In
this Act, unless the context otherwise requires:
"Actuary" means a fellow
of the Institute of Actuaries in England, or of the Faculty of
Actuaries in Scotland, or of the Canadian Institute of Actuaries,
or a person holding such equivalent qualification as the Board
may, by notice in the Gazette, prescribe;
"Authority" means the
Retirement Benefits Authority established by section 3;
"Board" means the Board
of Directors of the Authority constituted under section 6;
"Chief Executive Officer"
means the Chief Executive Officer of the Authority appointed
under section 11;
"financial year" means
the financial year of the Authority prescribed by section 19;
"Fund" means the
Retirement Benefits Authority Fund established by section 17;
"Levy" means the
Retirement Benefits Levy to be imposed under section 16;
"manager" means the
manager of a scheme fund;
"member" means a member
of a retirement benefits scheme and includes a person entitled to
or receiving a benefit under a retirement benefits scheme;
"Minister" means the
Minister for the time being responsible for matters relating to
finance;
"retirement benefits scheme"
means any scheme or arrangement (other than a contract for life
assurance) whether established by a written law for the time
being in force or by any other instrument, under which persons
are entitled to benefits in the form of payments, determined by
age, length of service, amount of earnings or otherwise and
payable primarily upon retirement, or upon death, termination of
service, or upon the occurrence of such other event as may be
specified in such written law or other instrument;
"scheme" means a
retirement benefits scheme;
"scheme fund" means the
retirement benefits scheme fund to be established pursuant to the
provisions of section 32;
"scheme rules" means the
rules specifically governing the constitution and administration
of a particular scheme;
"sponsor" means a person
who establishes a scheme;
"Tribunal" means the
Appeals Tribunal established under section 48;
"trustee" means a trustee
of a scheme fund.
PART
II - THE RETIREMENT BENEFITS AUTHORITY
3. Establishment and
incorporation of the Retirement Benefits Authority.
(1) There is established an
Authority to be known as the Retirement Benefits
Authority.
(2) The Authority shall be a
body corporate with perpetual succession and a common
seal and shall in its corporate name be capable of:
(a) suing and being
sued;
(b) taking, purchasing
or otherwise acquiring, holding, charging or
disposing of movable and immovable property;
(c) borrowing or
lending money: and
(d) doing or
performing all other things or acts for the
furtherance of the provisions of this Act. which
may be lawfully done or performed by a body
corporate.
4. Headquarters. The
headquarters of the Authority shall be in Nairobi.
5. Objects and functions of
the authority. The object and functions of the Authority
shall be to:
(a) regulate and supervise the
establishment and management of retirement benefits
schemes:
(b) protect the interests of
members and sponsors of retirement benefits schemes:
(c) promote the development of
the retirement benefits sector:
(d) advise the Minister on the
national policy to be followed with regard to retirement
benefits schemes and to implement all Government policies
relating thereto: and
(e) perform such other
functions as are conferred on it by this Act or by any
other written law.
6. Board of Directors.
The management of the Authority shall vest in a Board of
Directors of the Authority which shall comprise:
(a) a chairman to be appointed
by the Minister from amongst the members appointed under
paragraph (f);
(b) the Chief Executive
Officer appointed under section 11:
(c) the Permanent Secretary in
the Ministry for the time being responsible for matters
relating to finance or his representative;
(d) the Commissioner of
Insurance;
(e) the Chief Executive of the
Capital Markets Authority; and
(f) five members, not being
public officers, appointed by the Minister by virtue of
their knowledge or experience in matters relating to the
administration of scheme funds, banking, insurance, law
or actuarial studies.
7. Powers of the Board.
The Board shall have all powers necessary for the performance of
its functions under this Act and in particular, the Board shall
have power to:-
(a) control, supervise and
administer the assets of the Authority in such manner and
for such purposes as best promote the purpose for which
the Authority is established;
(b) determine the provisions
to be made for capital and recurrent expenditure and for
reserves of the Authority;
(c) receive any grants, gifts,
donations or endowments on behalf of the Authority and
make legitimate disbursements therefrom;
(d) enter into association
with other bodies or organisations within or outside
Kenya as the Board may consider desirable or appropriate
and in furtherance of the purpose for which the Authority
is established;
(e) open a banking account or
banking accounts for the funds of the Authority; and
(f) invest the funds of the
Authority not currently required for its purposes in the
manner provided in section 18.
8. Conduct of business and
affairs of the Board. The conduct and regulation of the
business and affairs of the Board shall be as provided in the
Schedule but subject thereto, the Board shall regulate its own
procedure.
9. Delegation by the Board.
The Board may, by resolution either generally or in any
particular case, delegate to any committee of the Board or to any
member, officer, employee or agent of the Authority, the exercise
of any of the powers or the performance of any of the functions
or duties of the Authority under this Act or under any other
written law.
10. Remuneration of Board
members. The Authority, in consultation with the Minister,
shall pay members of the Board such remuneration, fees or
allowances for expenses as it may determine.
11. The Chief Executive
Officer.
(1) There shall be a Chief
Executive Officer who shall be appointed by the Board in
consultation with the Minister and whose terms and
conditions of service shall be determined by the Board in
the instrument of appointment or otherwise in writing
from time to time.
(2) No person shall be
appointed under this section unless he has at least ten
years experience in a managerial capacity in the
retirement benefits, accounting, finance, insurance or
the banking sectors.
(3) The Chief Executive
Officer shall be an ex officio member of the Board but
shall have no right to vote at any meeting of the Board.
(4) The Chief Executive
Officer shall, subject to the directions of the Board, be
responsible for the day to day management of the affairs
of the Authority.
12. Staff of the Authority.
(1) The Board shall appoint a
secretary to the Board on such terms and conditions of
service as the Board may determine.
(2) The Board may appoint such
officers or servants as are necessary for the proper
discharge of the functions of the Authority under this
Act or any other written law, upon such terms and
conditions of service as the Board may determine.
13. The common seal of the
Authority.
(1) The common seal of the
Authority shall be kept in such custody as the Board may
direct and shall not be used except on the order of the
Board.
(2) The common seal of the
Authority when affixed to a document and duly
authenticated shall be judicially and officially noticed
and unless and until the contrary is proved, any
necessary order or
authorisation by the Board
under this section shall be presumed to have been duly
given.
14. Protection from personal
liability. No matter or thing done by a member of the
Board or any officer, employee or agent of the Authority shall,
if the matter or thing is done bona fide for executing the
functions, powers or duties of the Authority, render the member,
officer, employee or agent or any person acting on their
directions personally liable to any action, claim or demand
whatsoever.
15. Liability of the
Authority for damages. The provisions of this Act shall
not relieve the Authority of the liability to pay compensation or
damages to any person for any injury to him, his property or any
of his interests caused by the exercise of any power conferred by
this Act or any other written law or by the failure, whether
wholly or partially, of any works.
16.The Retirement Benefits
Levy.
(1) The Minister may, in
consultation with the Board, by order published in the
Gazette, impose a levy to be known as the Retirement
Benefits Levy on the contributions made to scheme funds,
or on the assets of such funds, or on such other base as
he may determine.
(2) A levy imposed under this
section shall be payable at such rate as may be specified
in the order.
(3) An order under this
section may contain provisions as to the time at which
any amount payable by way of the levy shall become due.
(4) All moneys received in
respect of the levy shall be paid into the Fund and if
not paid on or before the date prescribed by the order,
the amount due and any sum payable under subsection (5)
shall be a civil debt recoverable summarily by the
Authority.
(5) If a person fails to pay
any amount payable by him by way of the levy on or before
the date prescribed by the order, a sum equal to five per
centum of the amount shall be added to the amount due for
each month or part thereof during which the amount due
remains unpaid.
17. The Retirement Benefits
Authority Fund.
(1)There is established a fund
to be known as the Retirement Benefits Authority Fund
which shall vest in the Authority.
(2) There shall be paid into
the Fund:
(a) all proceeds of
the levy established by section 16;
(b) such moneys or
assets as may accrue to or vest in the Authority
in the course of the exercise of its powers or
the performance of its functions under this Act;
(c) such sums as may
be payable to the Authority pursuant to this Act
or any other written law, or pursuant to any gift
or trust;
(d) such sums as may
be granted to the Authority by the Minister
pursuant to subsection (3); and
(e) all moneys from
any other source provided for or donated or lent
to the Authority.
(3) There shall be made to the
Authority out of moneys provided by Parliament for that
purpose, grants towards the expenditure incurred by the
Board in the exercise of its powers or the performance of
its functions under this Act.
18. Investment of funds of
the Authority
(1) The Authority may invest
any of its funds in securities which for the time being
trustees may by law invest trust funds, or in any other
securities which the Treasury may, from time to time,
approve.
(2) The Authority may place on
deposit with such bank or banks as it may determine, any
moneys not immediately required for the purposes of the
Authority.
19. Financial year.
The Financial year of the Authority shall be the period of twelve
months ending on the thirtieth June in each year.
20. Annual estimates.
( 1) Before the commencement
of each financial year, the Board shall cause to be
prepared estimates of revenue and expenditure of the
Authority for that year.
(2) The annual estimates shall
make provision for all the estimated expenditure of the
Authority for the financial year and in particular, the
estimates shall provide for:
(a) the payment of the
salaries, allowances and other charges in respect
of the staff of the Authority;
(b) the payment of
pensions, gratuities and other charges in respect
of the retirement benefits which are payable out
of the funds of the Authority;
(c) the proper
maintenance of the buildings and grounds of the
Authority;
(d) the maintenance,
repair and replacement of the equipment and other
property of the Authority;
(e) the creation of
such reserve funds to meet future or contingent
liabilities in respect of retirement benefits,
insurance or replacement of buildings or
equipment, or in respect of such other matter as
the Board may deem appropriate.
(3) The annual estimates shall
be prepared at least three months before commencement of
the financial year to which they relate and shall be
submitted to the Board for approval and after such
approval, the Authority shall not increase the annual
estimates without the consent of the Minister.
(4) No expenditure shall be
incurred for the purposes of the Board except in
accordance with the annual estimates approved under this
section or in pursuance of an authorisation of the
Authority given with the prior approval of the Minister.
21. Accounts and audit.
(1) The Authority shall cause
to be kept all proper books and records of account of the
income, expenditure and assets of the Authority.
(2) Within a period of four
months after the end of each financial year, the Board
shall submit to the Auditor-General (Corporations) or an
auditor appointed under this section, the accounts of the
Authority together with:
(a) a statement of
income and expenditure during that year; and
(b) a statement of the
assets and liabilities of the Authority on the
last day of that year.
(3) The accounts of the
Authority shall be audited and reported upon in
accordance with sections 29 and 30A of the Exchequer and
Audit Act, by the Auditor-General (Corporations) or by an
auditor appointed by the Board under the authority of the
Auditor-General (Corporations), given in accordance with
section 29(2)(b) of that Act.
PART
III - REGISTRATION OF RETIREMENT BENEFITS SCHEMES AND MANAGERS
22. Retirement benefits
schemes and managers to be registered.
( 1) No person shall establish
a retirement benefits scheme except in accordance with
the provisions of this Act and under the authority of a
certificate issued under this Act.
(2) No person shall manage a
scheme fund unless such person is registered under this
Act and holds a valid certificate of registration issued
pursuant to the provisions of this Act.
(3) A person who establishes a
retirement benefits scheme or manages a scheme fund
contrary to the provisions of this section commits an
offence and shall be liable, on conviction, to a fine not
exceeding five hundred thousand shillings, or to
imprisonment for a term not exceeding two years, or to
both.
23. Registration.
(1)A person proposing to
establish a retirement benefits scheme or to manage a
scheme fund shall, before establishing the scheme or
commencing management of the fund, apply to the Authority
for registration.
(2) An application under
subsection (1) shall be:
(a) addressed to the
Chief Executive Officer;
(b) in the prescribed
form; and
(c) accompanied by the
prescribed fee.
(3) In considering an
application under this section, the Authority may request
the applicant to supply such additional information as it
considers necessary in determining the application.
(4) The Authority may, subject
to the provisions of this Act and on payment of the
prescribed fee, register the applicant and issue to the
applicant a certificate of registration in the prescribed
form, authorising the applicant to establish a retirement
benefits scheme, or to manage a scheme fund, as the case
may be.
(5) A certificate issued under
this section shall be subject to such conditions as the
Minister may, in consultation with the Authority, impose.
24. Requirements for
registration of schemes.
( 1) No scheme, other than a
scheme established by a written law shall be registered
under this Act unless:
(a) it is proposed to
be established under an irrevocable trust; and
(b) the proposed
scheme rules adequately protect the rights and
interests of the sponsors and members thereof.
(2) No scheme shall be
registered under this Act unless the trustees thereof
satisfy the requirements specified in section 26.
25. Requirements for
registration of managers. No applicant for registration
as a manager shall be registered unless such applicant:
(a) is a limited liability
company incorporated under the Companies Act whose
liability is limited by shares and whose main object is
to manage scheme funds;
(b) has such minimum paid up
share capital as may be prescribed;
(c) is capable of meeting the
obligations to members and sponsors specified in the
scheme rules;
(d) has the professional
capacity to manage scheme funds;
(e) has never been involved in
the management of the scheme fund of any scheme which was
deregistered due to any failure on the part of the
management;.
(f) meets such additional
requirements as may be prescribed.
26. Requirements with regard
to trustees.
(1) Every scheme, other than a
scheme established by a written law shall be established
under an irrevocable trust.
(2) No person shall be a
trustee of any scheme fund if such person:
(a) has been sentenced
to imprisonment by a court of competent
jurisdiction for a period of six months or more;
(b) is adjudged
bankrupt;
(c) was previously
involved in the management or administration of a
scheme which was deregistered for any failure on
the part of the management or the administration
thereof;
(d) is disqualified
under any other written law, or his holding
office as such is deemed by the Authority as
being, in any way, detrimental to the scheme.
27. Refusal of registration.
(1) The Authority may refuse
to register a scheme or a manager under section 23 if
satisfied that:
(a) the information
contained in the application for registration is
false or untrue in any material particular; or
(b) the applicant does
not meet the requirements for registration.
(2) Where the Authority
refuses to register a scheme or a manager, it shall
forthwith notify the applicant in the prescribed form,
specifying the reasons for such refusal.
28. Deregistration.
(1) Subject to subsection (2),
the Authority may deregister a scheme if:
(a) it discovers after
registration that a statement was made in
connection with the application therefor which
the applicant knew to be false or untrue in any
material particular; or
(b) the scheme is
wound up or is otherwise dissolved; or
(c) the scheme does
not conform to the provisions of this Act or any
regulations made or directions issued under this
Act or any condition of the certificate of
registration.
(2) The Authority shall,
before deregistering a scheme, give the trustees,
sponsors and members of the scheme at least twenty-eight
days notice of its intention and shall consider any
representations made to it in writing by the trustees,
sponsors or members within that period before
deregistering the scheme.
(3) Subject to subsection (4),
the Authority may deregister a manager if:
(a) it discovers after
registration that the manager made a statement in
or in connection with the application therefor
which was false or untrue in any material
particular; or
(b) any event occurs
which renders the manager ineligible to manage a
scheme fund;
(c) the manager's
business is wound up or is otherwise dissolved;
(d) the manager is in
breach of any condition attached to the
certificate of registration;
(e) the manager does
not comply with any of provisions of this Act, or
with any regulations made or directions issued
thereunder.
(4) The Authority shall,
before deregistering a manager, give the manager and the
sponsors or trustees of the scheme at least twenty-eight
days notice of its intention, and shall consider any
representations made to it in writing by the manager
within that period before deregistering the manager.
(5) Every notice under
subsections (2) and (4) shall be in the prescribed form
and shall specify the reasons for the intended
deregistration.
(6) The deregistration of a
scheme shall not in any way prejudice the claims of
members under the scheme.
(7) Where the assets of a
deregistered scheme are insufficient to fully discharge
its obligations to its members, the Chief Executive
Officer may, subject to the approval of the Board, take
over the distribution or transfer of the assets and the
supervision of the scheme in order to protect the
interests of members.
29. Duration of certificate
of registration. Subject to this Act, a certificate of
registration shall remain in force until, in the case of a scheme,
the scheme is deregistered or wound up in accordance with the
scheme rules or the provisions of the written law under which the
scheme is established, as the case may be, or in the case of a
manager, such manager is deregistered.
30. Register.
(1) The Chief Executive
Officer shall keep a register in such form as the Board
may determine, of all schemes and managers registered
under this Act and shall enter therein, in respect of the
schemes or managers, such particulars as the Board may
specify.
(2) The Board may determine
the time or times during which, and the extent to which
any person may, on payment of the prescribed fee, inspect
the register kept under this section or obtain copies
thereof.
31. Use of register in
evidence.
(1) For the purposes of
ascertaining the facts concerning the registration of a
scheme or a manager, entries made in the register shall
be prima facie evidence as to the facts specified in the
register.
(2) A document certified by
the Chief Executive Officer as a true copy or extract
from the register shall be admissible in any court as
prima facie evidence of the contents of the register.
PART
IV - REGULATION AND SUPERVISION OF RETIREMENT BENEFITS SCHEMES
32. Scheme funds.
(1) There shall be, in respect
of every scheme other than a scheme funded out of the
Consolidated Fund, a scheme fund into which all
contributions, investment earnings, income and all other
moneys payable under the scheme rules or the provisions
of this Act shall be paid.
(2) The scheme fund and all
monies therein shall at all times be maintained
separately from any other funds under the control of the
trustees or the manager thereof.
(3) Subject to the provisions
of this Act, the Minister may, in consultation with the
Authority, make regulations with regard to the funding,
vesting, custody, management, application and the
transfer of scheme funds and the accounting for such
funds.
33. Statutory contributions.
( 1) Notwithstanding the
provisions of any written law for the time being in force,
an employer may, with the approval of his employees, pay
any statutory contributions in respect of such employees
into any scheme fund prescribed for that purpose:
Provided that where such payment involves a transfer of
funds from another scheme fund, the employer shall, at
least sixty days before commencing such payment, give
written notice thereof to the Authority and to the
trustees of the scheme fund from which such funds shall
be transferred.
(2) In this section, the
expression "statutory contributions" means
contributions required under the provisions of a written
law to be paid into a retirement benefits scheme.
34. Annual report and
accounts.
(1) The trustees of every
scheme shall cause to be kept all proper books and
records of account of the income, expenditure and assets
of the scheme fund.
(2) Within a period of three
months after the end of each financial year, the trustees
shall cause to be prepared in respect of the scheme fund:
(a) a balance sheet;
(b) a statement of
income and expenditure;
(c) a statement of the
assets and liabilities of the scheme as on the
last day of that year;
(d) such other
documents as may be prescribed.
(3) The accounts of the scheme
fund in respect of each financial year shall be audited
by an auditor appointed by the trustees with the approval
of the Board.
(4) Within four months of the
end of each financial year, the trustees shall submit a
copy of the audited accounts of the scheme to the Chief
Executive Officer.
35. Actuarial evaluations.
The Board may require the trustees of such schemes or categories
of schemes as it may specify, to cause the schemes to be
evaluated by an actuary appointed by the trustees with the
approval of the Board and to present the actuarial report to the
Chief Executive Officer at such regular intervals as the Board
may specify.
36. Protection against
attachment. Notwithstanding anything to the contrary
contained in any other written law, where a judgement or order
against a member of a scheme is made, no execution or attachment
or process of any nature shall be issued in respect of the
contributions or funds of the member or his employer except in
accordance with the scheme the scheme rules and such
contributions shall not form part of the assets of the member or
of his employer in the event of bankruptcy.
37. Investment scheme funds.
(1) Every scheme shall have a
prudent investment policy on the investment of the funds
of the scheme so as to maintain the capital funds of the
scheme and to secure market rates of return on the
investment of such funds.
(2) The investment policy of a
scheme shall be implemented subject to the provisions of
any regulations the Minister may, in consultation with
the Authority, make for that purpose.
(3) There shall be submitted
to the Chief Executive Officer, in respect of every
scheme, a statement of all investments of the scheme fund,
in such form, manner and at such intervals as may be
prescribed.
38. Restrictions on use of
scheme funds.
(1) No scheme funds shall be
(a) used to make
direct or indirect loans to any person; or
(b) invested contrary
to any guidelines prescribed for that purpose; or
(c) invested with a
bank, non-banking financial institution,
insurance company, building society or other
similar institution with a view to securing loans,
including mortgages, at a preferential rate of
interest or for any other consideration to the
sponsor, trustees, members or the manager of such
scheme.
(2) The Authority may
disqualify a person who acts in contravention of the
provisions of this section from participating in any way
in the management or administration of any scheme fund.
39. Unsafe and unsound
practices.
(1) Where, in the opinion of
the Chief Executive Officer, a trustee or manager of a
scheme is pursuing an act or course of conduct which the
Chief Executive Officer considers to be an unsafe or
unsound practice, or in any way detrimental to the scheme,
the Chief Executive Officer shall, by notice in writing,
direct such trustee or manager to refrain from pursuing
such act or course of conduct.
(2) A trustee or manager who
acts in contravention of a direction under this section
commits an offence and shall be liable, on conviction, to
a fine not exceeding five hundred thousand shillings, or
to imprisonment for a term not exceeding two years, or to
both.
40. General obligations of
trustees and managers. The trustee or manager of a scheme
shall:
(a) ensure that the scheme
fund is at all times managed in accordance with this Act,
any regulations made thereunder, the scheme rules and any
directions given by the Chief Executive Officer;
(b) take reasonable care to
ensure that the management of the scheme is carried out
in the best interests of the members and sponsors of the
scheme;
(c) report to the Chief
Executive Officer, as soon as reasonably practicable, any
unusual occurrence which in his view could jeopardise the
rights of the members or sponsors of the scheme; and
(d) report to the Chief
Executive Officer, as soon as reasonably practicable, if
any contributions into a scheme fund remain due for a
period of more than thirty days.
PART
V - INSPECTION AND APPOINTMENT OF INTERIM ADMINISTRATOR
41. Inspection.
(1) The Chief Executive
Officer may, at any time and from time to time, and shall,
if so directed by the Board, cause an inspection to be
made by an inspector authorised by him in writing, of any
scheme or of the business of any manager registered under
this Act, and of its books, accounts and records.
(2) When an inspection is made
under subsection (1), the manager of the scheme concerned
and every officer, trustee or employee thereof shall make
available to the inspector all the books, accounts
records and other documents of the scheme and such
correspondence, statements and information relating to
the scheme as the inspector may require, within seven
days or such longer period as the inspector may direct in
writing.
(3) Any failure to produce any
books, accounts, records, documents, correspondence,
statements, returns or other information within the
period specified in the direction under subsection (2)
constitutes an offence:
Provided that:
(a) the books,
accounts and other documents shall not, in the
course of inspection, be removed from the
premises at which they are produced;
(b) the inspector may
make copies of any books, accounts and other
documents required for the purposes of his report;
and
(c) all information
obtained in the course of the inspection shall be
treated as confidential and used solely for the
purposes of this Act.
42. Powers of the inspector.
(1) An inspector may, by
notice in writing, require any person who is or has at
any time been a trustee or a manager of the scheme being
inspected, or an officer, employee, agent, accountant,
auditor or actuary appointed by such trustee or manager
to:
(a) give to the
inspector all reasonable assistance in connection
with the inspection; or
(b) appear before the
inspector for examination concerning matters
relevant to the inspection; or
(c) produce any books
or documents relating to the affairs of the
scheme being inspected.
(2) A person who:
(a) refuses or fails
to comply with a requirement of an inspector
which is applicable to him, to the extent to
which he is able to comply with it; or
(b) obstructs or
hinders an inspector in the exercise of his
powers under this Act; or
(c) furnishes
information or makes a false statement which he
knows to be false or misleading in any material
particular; or
(d) when appearing
before an inspector for examination, makes a
statement which he knows to be false or
misleading in any material particular, commits an
offence.
(3) A person convicted of an
offence under subsection (2) shall be liable to a fine
not exceeding fifty thousand shillings, or, in the case
of a natural person, to imprisonment for a term not
exceeding three years, or to both.
(4) Where an offence under
subsection (2) is a continuing offence, the person
convicted shall, in addition to the penalty prescribed in
subsection (3), be liable to a further fine of one
thousand shillings for every day during which the offence
continues.
(5) Where the person convicted
under this section is a body corporate, the Authority may,
notwithstanding any other penalty imposed under this Act,
apply to a1 court for the winding up of such body
corporate.
43. Inspection report.
An inspector appointed under this Part shall submit his report to
the Chief Executive Officer and the report shall draw attention
to any breach of the requirements of this Act and any regulations
made thereunder, any mismanagement or lack of management skills
in the manager and any other matter revealed or discovered in the
course of the inspection warranting, in the opinion of the
inspector, remedial action or further investigation.
44. Directions to manager.
The Chief Executive Officer may, by notice in the prescribed form,
require the trustees or the manager of a scheme inspected under
this Part to comply, by such date or within such period as may be
specified therein, with such directions as the Authority
considers necessary in connection with any matter arising out of
the report made under section 43.
45. Appointment of interim
administrator.
( 1) This section applies and
the powers conferred by subsection (2) may be exercised
in the following circumstances:
(a) if the trustees of
a scheme fail to submit to the Chief Executive
Officer the annual accounts required under
section 34 for over six months after the end of
the financial year to which they relate;
(b) if the trustees
are found to have submitted or provided any
accounts, returns, statements, books, records,
correspondence, documents or other information
relating to the scheme fund which are false or
misleading; or
(c) if the Chief
Executive Officer, whether on inspection or
otherwise, becomes aware of any fact or
circumstance which, in his opinion, warrants the
exercise of the relevant power in the interests
of the sponsors and members of the scheme or in
the public interest.
(2) The Chief Executive
Officer may, with the approval of the Authority:
(a) appoint any person
(in this Act referred to as "an interim
administrator") to assume the management,
control and conduct of the affairs and business
of the trustees or the manager, as the case may
be, to exercise all the powers of the trustees or
the manager to the exclusion of such trustees or
manager;
(b) remove any officer
or employee of the trustees or the manager who,
in the opinion of the Chief Executive Officer,
has caused or contributed to any contravention of
the provisions of this Act or any regulations
made thereunder or to any deterioration in the
financial stability of the scheme or has been
guilty of conduct detrimental to the interests of
the members or sponsors of the scheme; or
(c) by notice in the
Gazette, revoke or cancel any existing power of
attorney, mandate, appointment or other authority
by the trustees or manager in favour of any
officer, employee or any other person.
(3) The appointment of an
interim administrator shall be for such period, not
exceeding twelve months, as the Chief Executive Officer
may specify in the instrument of appointment but may be
extended by the High Court, upon application by the Chief
Executive Officer, if such extension appears justified.
(4) An interim administrator
shall, upon assuming the management, control and conduct
of the affairs and business of the trustees or the
manager, discharge his duties with diligence and in
accordance with sound actuarial and financial principles
and in particular, with due regard to the interests of
the trustees, the manager, the members and sponsors of
the scheme.
(5) The responsibilities of
the interim administrator shall be:
(a) tracing,
preserving and securing all the assets and
property of the scheme;
(b) recovering all
debts and other sums of money due to and owing to
the scheme;
(c) evaluating the
solvency and the liquidity of the scheme;
(d) assessing the
scheme's and the manager's compliance with the
provisions of this Act and any regulations made
thereunder;
(e) determining the
adequacy of the capital and reserves and the
management of the scheme and recommending to the
Chief Executive Officer any restructuring or
reorganisation which he considers necessary and
which, subject to the provisions of any other law,
may be implemented by him on behalf of the
trustees or the manager; and
(f) obtain from any
former trustee or manager of the scheme or any
officer, employee or agent thereof, any documents,
records accounts, statements, correspondence or
information relating to the scheme.
(6) The interim administrator
shall, within a period of twelve months from the date of
his appointment, prepare and submit to the Chief
Executive Officer, a report on the financial position and
the management of the scheme with recommendations as to
whether:
(a) the scheme is
capable of being revived; or
(b) the scheme should
be deregistered.
(7) The Chief Executive
Officer shall, after taking into account the report of
the interim administrator, make appropriate
recommendations to the Board which shall take a decision
on the matter.
(8) Neither the Chief
Executive Officer nor any officer, employee or agent of
the Authority nor the interim administrator nor any other
person appointed, designated or approved by the Chief
Executive Officer under the provisions of this Part shall
be liable in respect of any act or omission done in good
faith in the execution of the duties undertaken by him.
PART
VI- APPEALS
46. Appeals to the Chief
Executive Officer.
( 1) Any member of a scheme
who is dissatisfied with a decision of the manager or
trustees of the scheme may request, in writing, that such
decision be reviewed by the Chief Executive Officer with
a view to ensuring that such decision is made in
accordance with the provisions of the relevant scheme
rules or the Act under which the scheme is established.
(2) A copy of every request
under this section shall be served on the manager or
trustees of the scheme.
47. Establishment of Appeals
Tribunal.
(1) The Minister shall, by
order published in the Gazette, establish an Appeals
Tribunal for the purpose of hearing appeals under this
Act.
(2) The Tribunal shall consist
of a chairman and four other members who shall be
appointed by the Minister and who shall hold office for a
period of three years upon such terms and conditions as
may be prescribed.
(3) The chairman of the
Tribunal shall be an advocate of the High Court of Kenya
of not less than seven years standing.
(4) All matters before the
Tribunal shall, in the event of a difference of opinion,
be decided by the votes of the majority of the members
thereof.
48. Appeals to the Tribunal.
(1) Any person aggrieved by a
decision of the Authority or of the Chief Executive
Officer under the provisions of this Act or any
regulations made thereunder may appeal to the Tribunal
within thirty days of the receipt of the descision.
(2) Where any dispute arises
between any person and the Authority as to the exercise
of the powers conferred upon the Authority by this Act,
either party may appeal to the Tribunal in such manner as
may be prescribed.
49. Powers of Appeals
Tribunal.
(1) On the hearing of an
appeal, the Tribunal shall have all the powers of a
subordinate court of the first class to summon witnesses,
to take evidence upon oath or affirmation and to call for
the production of books and other documents.
(2) Where the Tribunal
considers it desirable for the purpose of avoiding
expense or delay or any other special reason so to do, it
may receive evidence by affidavit and administer
interrogatories and require the person to whom the
interrogatories are administered to make a full and true
reply to the interrogatories within the time specified by
the Tribunal.
(3) In its determination of
any matter, the Tribunal may take into consideration any
evidence which it considers relevant to the subject of an
appeal before it, notwithstanding that the evidence would
not otherwise be admissible under the law relating to
admissibility of evidence.
(4) The Tribunal shall have
power to award the costs of any proceedings before it and
to direct that costs shall be paid in accordance with any
scale prescribed for suits in the High Court or to award
a specific sum as costs.
(5) All summons, notices or
other documents issued under the hand of the chairman of
the Tribunal shall be deemed to be issued by the Tribunal.
(6) Any interested party may
be represented before the Tribunal by an advocate or by
any other person whom the Tribunal may, in its discretion,
admit to be heard on behalf of the party.
50. Refusal or failure to
give evidence. Any person summoned by the Tribunal to
attend and give evidence or to produce any records, books of
account, statements or other documents, or required to answer
interrogatories and who, without sufficient cause:
(a) refuses or fails to attend
at the time and place mentioned in the summons served on
him; or
(b) refuses or fails to answer,
fully and satisfactorily, to the best of his knowledge
and belief, all questions lawfully put to him by the
Tribunal; or
(c) refuses or fails to
produce any records, books of account, statements or
other documents which are in his possession or under his
control or mentioned or referred to in any summons served
on him, commits an offence and shall be liable, on
conviction, to a fine not exceeding one hundred thousand
shillings, or to imprisonment for a term not exceeding
two years, or to both.
51. Costs.
(1) Where the Tribunal awards
costs in an appeal, it shall, on application by the
person to whom the costs are awarded, issue to him a
certificate stating the amount of the costs.
(2) Every certificate issued
under subsection (1) may be filed in the High Court by
the person in whose favour the costs have been awarded
and upon being so filed, shall be deemed to be a decree
of the High Court and may be executed as such:
Provided that an order for
costs against the Government shall not be enforced save in
the manner provided for by the Government Proceedings Act.
52. Rules for appeals to the
Appeals Tribunal.The Chief Justice may make rules
governing the making of appeals and providing for the fees to be
paid, the scale of costs of any such appeal, the procedure to be
followed therein, and the manner of notifying the parties thereto;
and until such rules are made, and subject thereto, the
provisions of the Civil Procedure Act shall apply as if the
matter appealed against were a decree of a subordinate court
exercising original jurisdiction.
PART
VII - MISCELLANEOUS
53. General penalty.
(1) Any person who:
(a) contravenes any
provision of this Act which is expressly stated
to be an offence but for which no other penalty
is prescribed; or
(b) fails to comply
with any direction given by the Chief Executive
Officer under this Act;
commits an offence and shall be
liable, on conviction, to a fine not exceeding one hundred
thousand shillings, or to imprisonment for a term not
exceeding one year, or to both.
(2) A person does not commit
an offence under subsection (1), if he proves, to the
satisfaction of the court, that the act or omission
constituting the offence was done without his knowledge,
consent or connivance and that he attempted to prevent
the commission of the offence having regard to all the
circumstances of the case.
54. Offences by corporate
bodies, partnerships, principals and employees.
(1) When an offence under the
provisions of this Act is committed by a body corporate,
the body corporate and every director or officer thereof
who had knowledge or should have had knowledge of the
commission of the offence and who did not exercise due
diligence to ensure compliance with this Act commits an
offence.
(2) Where an offence is
committed under this Act by a partnership, every partner
or officer of the partnership who had knowledge or who
should have had knowledge of the commission of the
offence commits an offence.
(3) A person shall be
personally liable for an offence against this Act whether
committed by him on his own account or as an agent or
servant of another person.
(4) An employer or principal
shall be liable for an offence committed by an employee
or agent against this Act unless the employer or
principal proves that the offence was committed against
his express or standing directions.
55. Regulations.
(1) The Minister may, in
consultation with the Authority, make regulations
generally for the better carrying out of the provisions
of this Act.
(2) Without prejudice to the
generality of subsection (1), regulations under this
section may:
(a) prescribe anything
required to be prescribed under this Act;
(b) subject to this
Act, provide for the procedure for registration
and the conditions of registration;
(c) provide the
eligibility requirements for the membership of
schemes and access to retirement benefits;
(d) provide for any
matter relating to the nature of benefits under
schemes;
(e) prescribe the fees
and other charges payable to the Authority;
(f) regulate the
transitional period prescribed by section 57.
56. Exemption. The
provisions of the State Corporations Act shall not apply to the
Authority.
57. Transitional provisions.
Any person who, at the commencement of this Act, is a trustee or
manager of a scheme to which this Act applies shall, within sixty
days of the commencement, or within such longer period as the
Minister may, in consultation with the Authority prescribe, apply
for registration under this Act:
Provided that the period prescribed
under this section shall not exceed three years.
58. Supersession.
Where there is a conflict between the provisions of this Act and
the provisions of any written law (other than the Constitution)
with regard to the powers or functions of the Authority under
this Act, the provisions of this Act shall prevail.
SCHEDULE
PROVISIONS AS TO THE CONDUCT OF BUSINESS AND AFFAIRS OF THE BOARD.
1.Tenure of office.
(1)A member of the Board other
than an ex officio member shall, subject to the
provisions of this Schedule, hold office for a period not
exceeding four years, on such terms and conditions as may
be specified in the instrument of appointment but shall
be eligible for re-appointment for one more term of a
period not exceeding four years.
(2) The members of the Board
shall be appointed at different times so that the
respective expiry dates of the members terms shall fall
at different times.
2.Vacation of office.
A member other than the chairman or an ex officio member may
(a) at any time resign from
office by notice in writing to the Minister;
(b) be removed from office by
the Minister if the member :
(i) has been absent
from three consecutive meetings of the Board
without permission from the chairman; or
(ii) is adjudged
bankrupt or enters into a composition scheme or
arrangement with his creditors; or
(iii) is convicted of
an offence involving dishonesty, fraud or moral
turpitude; or
(iv) is convicted of a
criminal offence and sentenced to imprisonment
for a term exceeding six months or to a fine
exceeding ten thousand shillings; or
(v) is incapacitated
by prolonged physical or mental illness; or
(vi) is otherwise
unable or unfit to discharge his functions.
3. Meetings.
(1) The Board shall meet not
less than four times in every financial year and not more
than four months shall elapse between the date of one
meeting and the date of the next meeting.
(2) Unless three quarters of
the total members of the Board otherwise agree, at least
fourteen days' written notice of every meeting of the
Board shall be given to every member of the Board.
(3) The quorum for the conduct
of the business of the Board shall be three members
excluding the Chief Executive Officer.
(4) The chairman shall preside
at every meeting of the Board at which he is present but
in his absence, the members present shall elect one of
their number who shall, with respect to that meeting and
the business transacted thereat, have all the powers of
the chairman.
(5) Unless a unanimous
decision is reached a decision on any matter before the
Board shall be by a majority of votes of the members
present and in the case of an equality of votes, the
chairman or the person presiding shall have a casting
vote.
(6) Subject to paragraph (3),
no proceedings of the Board shall be invalid by reason
only of a vacancy among the members thereof.
(7) Subject to the provisions
of this Schedule, the Board may determine its own
procedure and the procedure for any committee of the
Board and for the attendance of any other persons at its
meetings and may make standing orders in respect thereof.
4. Disclosure of interest.
(1) If a member is directly or
indirectly interested in any contract, proposed contract
or other matter before the Board and is present at a
meeting of the Board at which the contract, proposed
contract or other matter is the subject of consideration,
he shall, at the meeting and as soon as practicable after
the commencement thereof, disclose the fact and shall not
take part in the consideration or discussion of, or vote
on any questions with respect to the contract or other
matter, or be counted in the quorum of the meeting during
consideration of the matter: Provided that if the
majority of the members present are of the opinion that
the experience or expertise that member is vital to the
deliberations of the meeting, the Board may permit the
member to participate in the deliberations subject to
such restrictions as it may impose.
(2) A disclosure of interest
made under this paragraph shall be recorded in the
minutes of the meeting at which it is made.
5. The common seal.
The affixing of the common seal of the Authority shall be
authenticated by the signatures of the chairman and the Chief
Executive Officer and any document required by law to be made
under seal and all decisions of the Board may be authenticated by
the signatures of the chairman and the Chief Executive Officer:
Provided that the Board shall, in
the absence of either the chairman or the Chief Executive Officer,
in any particular matter nominate one member to authenticate the
seal of the Board on behalf of either the chairman or the Chief
Executive Officer.
6. Contracts and instruments.
Any contract or instrument which, if entered into or executed by
a person not being a body corporate, would not require to be
under seal, may be entered into or executed on behalf of the
Authority by any person generally or specially authorised by the
Authority for that purpose.
7. Minutes. The Board
shall cause minutes of all proceedings of meetings of the Board
to be entered in books kept for that purpose.
