Kenya’s pensions industry regulators have moved to calm confusion over new rules governing retirement benefits schemes in the East African nation.
In a joint statement on Monday, the Retirement Benefits Authority (RBA) and the Institute of Certified Public Accountants of Kenya (ICPAK) provided clarification on recent regulatory changes enacted through legal notices late last year.
The reforms have caused some uncertainty, prompting ICPAK to issue a technical advisory on valuing retirement schemes’ assets. This week’s statement aimed to “provide guidance” and encourage collaboration between the regulators.
According to the RBA and ICPAK, retirement benefits schemes should continue preparing financial statements according to international accounting standards. New rules on valuation of scheme funds issued by the RBA apply only to trustee reports, not full financial reporting, the statement outlined.
“All preparers of financial statements and auditors are urged to proceed with the requirements and understanding as required in the existing International Financial Reporting Standards,” it said.
The regulators also addressed amendments concerning the determination of net interest payable to pension scheme members. ICPAK had questioned whether unrealised losses on debt instruments should be excluded from returns credited to members.
Monday’s joint release affirmed that net returns declared to members should exclude such unrealised gains and losses. It added that trustee reports to members should include details on how net returns were calculated.
Finally, the RBA and ICPAK said they “have agreed to work collaboratively in the regulation of both the retirement benefits industry and the accountancy profession.” The two will develop “illustrative financial statements” to align with both accounting standards and Kenya’s new pension rules.
