Recovery of stolen money from employee’s pension benefits
Our accountant stole money from the Company, was convicted and sentenced to pay a fine which he paid, and subsequently was discharged. In addition to paying the fine, he was ordered to restitute the stolen money to the Company which he has not done. It is now a year since he was convicted by the Court and such orders made. We have discovered that he never appealed the decision of the Court and has no assets to attach to recover the stolen money. This employee is attaining a compulsory retirement age in May this year and will be getting his retirement benefits. Is it possible to recover the stolen money from his pension benefits? Please guide us.
KL, Dar
As a general rule, pension contribution is the property of the Pension Fund and does not form part of the employee’s assets or estate capable of attachment to satisfy Court orders until such time when the benefit is paid to the insured employee. Section 76 of the National Social Security Pension Fund Act [Cap.50 R.E 2018] allows the pension contribution to be used only as a collateral for home mortgage in which case the mortgagee shall have the right to attach the portion of the contribution used as collateral to secure the home mortgage. Section 20(1) of the Act declares void any pledge, security or assignment which purports to include pension contribution or benefits other than a security for home mortgage which is allowed by section 76 of the Act.
However, where the insured employee is convicted of an offence involving dishonesty and the convicting Court is satisfied that there is a material loss suffered by the employer as a result of the offence for which the employee has been convicted, the Court may invoke section 20(3) of the Act to order restitution of the stolen property to be made out of the pension contribution or benefit due to the employee. But this recovery from the employee’s pension contribution is subject to the condition that the aggregate amount to be recovered from the employee pension benefit or contribution should not exceed the total amount of employer’s share he contributed for the employee. The Company can therefore ask the prosecutor to make an application to the Court to direct that the stolen money be recovered from the employee’s pension contribution or benefit.