| dc.description.abstract | Income accrued from Retirement Bene ts Fund is an exceptionally important component of
every working individual's life cycle globally. The major sources of such income are: unfunded
state pensions; funded private pensions; mandatory schemes; and post-retirement work. The
urgency and importance has made many countries to give it considerable attention by enacting
enabling laws and policies to safeguard it. In Kenya, steps have been made by establishing the
National Social Security Fund and enacting the Retirement Bene ts Act and Regulations; to
protect retirement bene ts for the ageing population which is at an annual rate of 0.45 percent.
Even though the country has experienced a positive growth from the past decades attaining
KES. 1.08 trillion by the end of 2017, full potential growth hasn't been achieved. This is mainly
attributed to leakages in the fund as a results of non-remittance of contribution despite it being
the major source of funding in the de ned contribution scheme. The absence of proper policy
and professional guidelines on how the lost interest should be handled to bene t the members
exacerbate the loss. The purpose of this study is to determined adequate remedial plan taking
into consideration actuarial costing method. The speci c objective includes; to calculate the
accrued liability resulting from non-remitted contribution, to determine the payment period
of the accrued liability and determine the interest rates applicable for the unfunded liability.
The study determined actuarial rate by multiplying exponential raised to in
ation rate with
realized rate of return and the same was done for rate of 91-day treasury. The highest of the
two rates was then selected to be the computed compensation rate that was then used to com-
pute actuarial liability of the scheme. ARIMA (2,0,0) was then tted to forecast the future
compensation rate. The forecast rates were later used to determine possible payment periods.
The study also found out that retirement bene ts are depleted by rate of in
ation and non
remitted contribution thus in
ation should be taken into consideration when valuing actuarial
liability of the scheme for non-remitted contribution. We obtained the rates of 91-day T-bill
from Nairobi Stock Exchange web-site while the rate of in
ation was obtained from Kenya
National Bureau of Statistics. Finally, the results from this study will be of importance to
scheme trustee, members, regulator and policy makers.
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