The Government, through the Cabinet Secretary for the National Treasury and Planning published Legal Notice Number 88 of 2019 dated 13th June, 2019 which amended the Retirement Benefits (Occupational Retirement Benefits Schemes) Regulations, 2000 (the “Regulations”). Regulation 19 (5) (a) (ii) was amended to read as follows: “the scheme rules shall provide that: where a member leaves employment after vesting of his benefits but before attaining the specified early retirement age, he may opt for payment of his own contribution where he is a member of a defined contribution scheme.
The effect of this amendment was that where the employment relationship came to an end and the employee had not reached the retirement age provided for in the Trust Deed and/or the Pension/Provident Fund Rules, he/she would no longer be entitled to the employer’s portion of contributions and the investment income gained from the contributions until he attained the retirement age.
The Regulations were, however, challenged on a number of grounds including absence of public participation. The Parliamentary Committee on Delegated Legislations, upon further consideration, proposed through this report that the amendments be annulled. The Report was tabled and adopted by Parliament on 2nd October, 2019, thereby annulling the proposed amendments. Attached is a copy of the Parliamentary Hansard highlighting (in yellow) the tabling and adoption of the report.
Consequently, employees are now entitled to 100% of their contributions and 50% of the employer’s contributions upon termination of employment.
Please reach out to us if you require specific advice on this development or on pension/retirement benefits generally.