Auditor General Nancy Gathungu warns of pension losses as government delays remittances
Gathungu warned that the delays violate the Public Service Superannuation Scheme Act of 2012, which mandates that contributions must be remitted within 10 working days after the end of the month in which they are due.
Thousands of civil servants, teachers, and police officers have missed out on billions in pension returns due to repeated delays by the government in remitting statutory contributions, according to a recent audit.
The report by Auditor General Nancy Gathungu reveals that while the Public Service Superannuation Fund (PSSF) grew to a record Sh242 billion in the year ending June 2025, significant sums that could have earned investment returns were left unremitted.
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The audit flagged Sh10.6 billion in contributions owed by the government during the period under review.
This figure includes both employer and employee contributions that were deducted from workers’ salaries but not forwarded to the fund on time.
Of this amount, Sh9.38 billion was eventually paid after the fiscal year ended in August 2025, while Sh1.22 billion remained unpaid.
Gathungu warned that the delays violate the Public Service Superannuation Scheme Act of 2012, which mandates that contributions must be remitted within 10 working days after the end of the month in which they are due.
“Unless the outstanding balance is paid together with the penalty provided for under the Act, contributors stand to lose returns that would have been earned had the contributions been received in time,” she said.
The Auditor General noted that these delays denied the fund the chance to invest contributions promptly, causing long-term losses for members.
“In the circumstances, the management was in breach of the law,” Gathungu added in the report signed in September 2025.
PSSF chairman Hussein Dado, however, highlighted the fund’s growth over the year, noting a 70.4 per cent increase from Sh142 billion to Sh242 billion.
Investment income rose by 80.5 per cent to Sh25.3 billion, fueled by stakes in government securities, equities, and offshore assets.
Despite these gains, the audit uncovered serious governance and compliance issues. The board of trustees violated the constitutionally mandated gender rule, with 77 per cent of members being male.
Furthermore, the board and its key committees exceeded the approved number of meetings, holding 11 and seven sessions respectively, without evidence of Cabinet Secretary approval as required by a 2020 circular.
“Management did not provide evidence of approval of the extra meetings by the Cabinet Secretary as required by the circular,” Gathungu said.
The audit also highlighted the fund’s failure to employ people living with disabilities, contrary to the legal five per cent reservation.
Weaknesses in the member data system were evident, with thousands of records missing critical information such as pension status, contribution amounts, retirement dates, and contact details.
Some irregularities included 194 members over 60 still listed as active, 16,700 members lacking gender information, 13 without sponsors, and one missing a personal number.
“In the circumstances, the existence of effective controls on member details and data could not be confirmed,” Gathungu stated.
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