The Kenya Broadcasting Corporation (KBC) is in hot soup as it is embroiled in a legal tussle regarding Sh2.7 billion staff pension money.
According to Nation, the funds are reported to have been deducted from employees’ salaries but not remitted to their Retirement Benefits Scheme.
Consequently, this has left the KBC Retirement Scheme Members living in fear of retiring in poverty since the deductions have not been remitted for close to a decade.
“At least 70 percent of KBC employees are aged over 48 years and are living in fear of retirement given that they will neither receive pension lump sum nor be eligible for pension income because of the financial damage directly caused by the State broadcaster,” Ms Jane Kaimbi, one of the claimants is quoted in the court documents.
Further, the non-remittance has exposed the scheme to regulatory censure by the Retirement Benefits Authority (RBA) including the threat of winding up. For instance, an actual valuation of the scheme revealed a deficit of over Sh2.1 billion as at June 30, 2016. The figure is reported to have grown to over Sh2.8 billion by the time the case was filed in court in September 2018.
“The actions of KBC have put the scheme in great financial jeopardy. Former employees who worked hoping they would receive payment to sustain them in retirement may be rendered destitute,” the trustees are quoted in court documents.
According to the documents in court, the trustees call for the recovery of all contributions that were not remitted to the retirement scheme.
However, the Broadcaster states that it is unable to pay all the funds needed at once as the move will leave it crippled at the time that it is struggling with tough economic effects.
Ultimately, an affidavit by Jeremiah Marakia indicates that the Broadcaster will also be unable to meet the salary requirements of its current staff hence the move will jeopardize their livelihood.
A temporary order has been secured by the trustees to have KBC to start remitting monthly deductions for the scheme as of this month, May.