Review of the Retirement Benefits Practice Notes for Determining Defined Benefits Obligations

The Retirement Benefits Authority (RBA) introduced the Retirement Benefits Practice Notes as per Gazette Notice No. 1239. These notes, developed under section 55(3) of the Retirement Benefits Act, 1997, aim to provide a structured approach for managing defined benefit (DB) schemes.

Key Objectives and Scope

The Practice Notes serve several critical purposes:

  1. Guidance: They offer comprehensive instructions for trustees, sponsors, administrators, and actuaries on handling and processing benefits.
  2. Communication: They enhance communication with scheme members and facilitate dispute resolution.
  3. Protection: They ensure the safeguarding of members’ benefits within DB schemes.

Applicable to all DB schemes registered with the Authority, these notes emphasize principles such as fairness, transparency, accountability, and efficiency in their implementation.

Communication and Disclosure

Effective communication is paramount. Trustees must inform members in writing about any changes to the benefit structure within 30 days. Additionally, benefit statements should be clear, detailed, and accessible. Members have the right to full disclosure of their options, including lump-sum pension withdrawals and implications of transferring out of the scheme. Trustees must also provide actuarial valuation reports upon request within seven days.

Amendment of Scheme Rules

Scheme rules can be amended provided they do not reduce accrued member benefits or invalidate sponsors’ interests. Amendments must be prospective unless they improve member benefits and comply with legal requirements. Any changes affecting the scheme’s financial position require an actuarial certificate and must be approved by the Authority.

Benefit Calculations and Determinations

Trustees are responsible for determining benefit entitlements based on the scheme’s trust deed, rules, and relevant laws. They must use actuarial advice to establish funding levels, commutation factors, and retirement factors, ensuring accurate benefit calculations.

Discharge of Defined Benefits

Trustees must ensure benefits are discharged according to scheme rules, safeguarding members’ rights. Liability transfers should be fully funded, and due diligence is required when selecting underwriters. Final reports must be filed with the Authority, with a 30-day complaint window for members.

Members’ Expectations

Trustees should manage expectations by providing accurate, up-to-date information and documenting past practices related to benefit discharges.

Scheme Legal Instruments

Trustees and sponsors must ensure that trust deeds and scheme rules are current, clear, and consistent with the Act and Regulations. These documents form the basis for determining member benefits and must be professionally prepared.

Protection of Members’ Benefits

Trustees must ensure compliance with funding requirements as dictated by actuarial valuations. In cases of underfunding, benefits may be prorated, and sponsors must cover outstanding balances. Surpluses should be distributed according to the law or Practice Notes.

Professionalism and Conduct

Actuaries, administrators, and trustees must disclose any conflicts of interest and support independent investigations. They should also maintain professional indemnity cover for liabilities arising from their duties.

Records Management

Trustees are required to maintain comprehensive records related to membership, benefits, legal instruments, and actuarial valuations. These records must be available to the Authority upon request.

Conflict Resolution

DB schemes must have internal dispute resolution frameworks. Members can lodge complaints with the Authority and, if necessary, appeal decisions to the Retirement Benefit Tribunal or a court of competent jurisdiction.


The Practice Notes aim to foster fair, transparent, and efficient management of DB schemes, prioritizing the protection of members’ rights and benefits. By providing clear guidelines and enhancing communication, the Practice Notes seek to build trust and ensure the smooth operation of DB schemes.

For more information on the Practice Notes or any related concern or query, please reach to Simon Muinde at



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