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{
    "id": 939126,
    "url": "https://info.mzalendo.com/api/v0.1/hansard/entries/939126/?format=api",
    "text_counter": 193,
    "type": "speech",
    "speaker_name": "Tharaka, JP",
    "speaker_title": "Hon. George Gitonga",
    "speaker": {
        "id": 13491,
        "legal_name": "George Gitonga Murugara",
        "slug": "george-gitonga-murugara"
    },
    "content": "It is important that I move that we now consider the Report on the Retirement Benefits (Occupational Retirement Benefits Schemes) (Amendment) Regulations of 2019. These regulations were made pursuant to Section 55 of the Retirement Benefits Act (No.3 of 1997). The Regulations were published in the Kenya Gazette via Legal Notice No.88 of 2009 on 13th June, 2019. They were received by the Clerk of this House on 21st June, 2019 and Tabled on 21st June, 2019. The purpose of the Regulations, briefly, was to expand the requirements of the content of the Schemes Rules to include distribution of reserve funds to existing members, where the Scheme maintains a Reserved Fund. This is where a Scheme has a Reserve Fund, part of which can be distributed to the Members in accordance with Rules and Regulations of that Scheme. Two, Regulation (19)(5)(a) of the Principle Regulations allows a person who opts out to retire early to access his or her own contribution and 50 per cent of the employer’s contribution. The investment income that has accrued in respect of those contributions where he or she is a Member of a defined contribution, the amendment now seeks to delete those benefits to a person opting to retire early. We received a Memorandum (an explanatory Memorandum). Thereafter, we received another one from Mr. Eliud Ogutu addressed to the Committee for consideration of the objections to the Regulations. He observed that the amendment would deny him access to the investment income accrued from his own contributions which, in essence, means he has contributed to the Scheme and is being denied the use of his own funds. He also made a complaint that there was no adequate public participation regarding the Regulations. The Members weighed the pros and cons and the impact of the amendment with some supporting while others expressing concerns that the amendments would frustrate members of pension schemes who wish to exit and use their contributions to increase their income or sustain themselves in the absence of any other source of income. Again, we laid emphasis to the fact that the purpose of benefit schemes is to ensure that the contributor is comfortable at all times. The comfort must also be enjoyed during the lifetime of a contributor. There would be little point in contributing purely to die and leave behind the contributions to be enjoyed by the beneficiaries. The Committee’s observations were as follows: (i) The Regulations were submitted to the National Assembly in time; (ii) The Regulations failed to demonstrate sufficient public participation contrary to Articles 10 and 118 of the Constitution and Section 5 and 5(a) of the Statutory Instruments Act on the Regulations; (iii) There was a complaint through a Memorandum which was addressed by Mr. Ogutu to the House. Mr. Ogutu is a lawyer and a member of Stanbic Kenya Retirement Benefits Scheme detailing lack of public participation – and the Committee upheld that objection; (iv) That the Regulations were likely to impose significant costs on the person who may opt to retire early because they would not be accessing their money; (v) Contrary to Section 13(k) of the Statutory Instruments Act, the Regulations make rights, liberties and obligation duly dependent upon non- reviewable decisions. These are decisions by authorities on who we have no control over; and when those decisions are made, they are actually binding. That is to the detriment of the contributors; and, (vi) Contrary to Section 13(m) of the Act, the Regulations make rights, liberties or obligation on newly independent insufficiently defined administrative powers as most of those decisions would be by the Pension Fund Managers. These are actually the controllers of the contributions. The electronic version of the Official Hansard Report is for information purposes only. Acertified version of this Report can be obtained from the Hansard Editor."
}