Senators demand answers from TUK after billions go missing from staff retirement scheme
The institution reportedly failed to remit staff contributions for years, with funds deposited into an unregistered and non-compliant account.
The Technical University of Kenya (TUK) is under scrutiny after revelations emerged that its staff retirement benefits scheme had collapsed, leaving retirees and employees nearing retirement facing severe financial losses.
The institution reportedly failed to remit staff contributions for years, with funds deposited into an unregistered and non-compliant account, raising questions over financial oversight and whether university officials deliberately mismanaged workers’ savings.
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The Senate Standing Committee on Labour and Social Welfare, chaired by Kilifi Senator Stewart Madzayo, summoned Vice Chancellor Prof Benedict Mutua to explain the handling of the scheme. Mutua faced intense questioning over how deductions were collected but not remitted to the retirement benefits scheme.
Records revealed that between 2009 and 2013, TUK operated an unregistered pension scheme, depositing contributions into a Kenya Commercial Bank account that did not comply with regulations. By April 2013, the account held Sh244.9 million, but by May 8, the balance had dropped to Sh9.5 million.
The university only applied to register the Technical University of Kenya Staff Retirement Benefits Scheme (TUKSRBS) on May 29, 2013, after the funds had been drained and registration was completed in November 2013.
Charles Machira, chief executive of the Retirement Benefits Authority (RBA), described the scheme’s state as catastrophic.
“Anybody who has Sh1 million in accrued benefits can only be paid Sh170,000,” he said.
He added that the scheme had assets worth Sh755 million against liabilities of Sh4.2 billion, prompting the High Court to order liquidation and appoint an official receiver to manage the remaining funds.
Senators reacted with outrage, accusing university officials of orchestrating the mismanagement of staff savings.
“This was actually a scheme organised and coordinated by managers who were pilfering and stealing money from the pension fund,” Kisii Senator Richard Onyonka said.
Documents tabled indicated that senior administrators, including the then Acting Vice Chancellor Prof Francis Aduol, were signatories to the disputed account, raising concerns over possible collusion at the university’s highest levels. Embu Senator Alexander Mundigi demanded that Prof Aduol appear before the committee.
Under questioning, Prof Mutua admitted wrongdoing.
“We accept that the law was broken,” he said, attributing the failure to remit deductions to financial constraints and bureaucratic hurdles.
Muranga Senator Joe Nyutu pressed for accountability, asking, “When you discovered deductions were not being remitted, did you make any recommendations? Where is the hope for employees who suffered these deductions?”
RBA stated that the matter had been escalated to the line ministry and the University Council before the scheme was declared insolvent and wound up.
Senator Onyonka called for a full forensic audit to trace the missing billions and hold those responsible accountable.
Prof Mutua is expected to present a roadmap detailing how TUK intends to compensate affected pensioners and safeguard staff approaching retirement.
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