Penalties against Defaulting Employers
All contributing authorities to Authorized Superannuation Fund (ASF) are to take note of the mandatory requirements under the Superannuation (General) Provisions Act 2002 and the Superannuation Regulations in terms of the measures/penalties for failing to comply with such requirements in remitting both employer and employee contributions.
An employer is required to contribute on behalf of each employee; it is also required to deduct employee contributions from employees' salaries. These are then remitted to an ASF at the end of each month and each fortnight respectively.
Failure by an employer to comply with these requirements amounts to an offence under Section 78 of the Superannuation (General Provisions) Act 2002, which carries a fine not exceeding K 500, 000.00 or imprisonment for 10 years or both.
In view of the tougher penalties, which are now in force and to avoid the Central Bank from taking extreme measures against the defaulters, employers are urged to remit all contributions within the time required.
Recovering Missing Superannuation Contributions
When an employer fails in making superannuation contribution for and on behalf of its employees, a relevant Authorised Super Fund (ASF) has the authority under Section 79 of the Superannuation General Provisions Act 2002 to act on behalf of employees (members) to recover the outstanding contributions together with interest and penalty fees at the rate prescribed in the regulation from the date on which payment was due to the date of actual payment.