In a recent development, the Retirement Benefits Authority (RBA) has mandated the Kenya Broadcasting Corporation (KBC) to halt the deduction of employees' monthly pension contributions.

The move comes as a result of the low funding level detected in the KBC Staff Retirement Benefits Scheme, prompting immediate action.

The decision communicated through an official memorandum from the Ag. Managing Director to the members of the KBC Staff Retirement Benefits Scheme marks a significant shift in the financial dynamics of the corporation's retirement program.

"This is to inform you that the Retirement Benefits Authority (RBA) has directed the Corporation to cease deducting employees' monthly pension contributions with immediate effect due to the low funding level of the KBC Staff Retirement Benefits Scheme," the memo read.

Effective from January 2024, employees will no longer witness a 7 per cent deduction from their payslips towards the pension scheme.

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"In this regard, the Corporation will no longer deduct from your payslips the 7 per cent employee's pension contributions with effect from January, 2024. However, the Sponsor's contributions will remain a liability and payable by the Sponsor," RBA said.

The sudden cessation of deductions raises questions about the sustainability and financial health of the pension scheme.

The memo also highlights that the Sponsor's contributions will persist as a liability, remaining payable by the Sponsor despite the discontinuation of employee deductions.

This directive from the RBA places the corporation in a challenging position, compelling it to reassess the financial stability and viability of its retirement benefits scheme.

The impact on the employees, who will no longer contribute to their pension funds, is a significant shift in their financial planning and retirement preparations.

While the corporation has not disclosed specific details about the current funding level or the reasons behind the scheme's financial struggles, it underscores the broader issues facing pension schemes in the current economic climate.

The move also brings attention to the critical role regulatory bodies play in overseeing and ensuring the financial health of retirement benefit schemes.

As employees absorb this unexpected change, discussions are likely to emerge regarding the corporation's commitment to addressing the underlying issues affecting the KBC Staff Retirement Benefits Scheme.

The onus is now on the corporation to communicate a clear plan of action and provide reassurance to its workforce about the future of their retirement benefits.