23 June 2009
Nairobi — More than 600 former employees of Standard Chartered Bank have slapped it with the biggest pension claim in Kenya's corporate history.
The group -- seeking Sh14 billion -- claims that the bank failed to take into account various issues, such as housing allowance and future cost of living adjustment, among others, when calculating the pension benefit.
The bank, therefore, ended up with a lower figure.
In their suit papers filed at the High Court on Tuesday, the 629 former employees say that going by their calculations, they are entitled to Sh14 billion and they want the bank to be compelled to pay them the money.
The former employees further accuse the bank of illegally transferring Sh1.1 billion from the pension fund and reducing what they were entitled to.
Such transfer, they say, can only be done when the bank wants to wind up the fund, which was never the case.
They say they were not consulted when the transfer of Sh1.1 billion from the fund to the bank was done.
This action, the former workers say, directly altered their accrued pension benefits and also deprived them of potential cost of living adjustments.The Sh1.1 billion, which the former employees are complaining about, was the bank's service surplus.
On December 20, 1999 the bank wrote to the Commissioner of Income Tax informing him that the surplus belongs to it and ought to be in its hands.
And when seeking approval to have the Sh1.1 billion surplus transferred, the bank said the action would not have a negative impact on benefits to be paid to existing members because they would be adequately funded even after transfer had taken place.
A month later, the commissioner wrote back to the bank declining to sanction the transfer.
However, the transfer was allowed later, the court papers indicate.
The former employees have sued the bank, five trustees of Standard Chartered Kenya Pension Fund (which was the first scheme) and trustees of Standard Chartered Kenya Staff Retirement Benefits Scheme (second scheme).
The bank is yet to file its response to the case because it has not yet been served with the summons from court.