Pension crisis: Universities, state agencies among top defaulters holding Sh57 billion
Public institutions are responsible for Sh54.4 billion of the unremitted funds, while Sh2.4 billion is owed by private sector entities.
Pension crisis: Universities, state agencies among top defaulters holding Sh57 billion
A report tabled before the National Assembly Committee on Finance and National Planning has revealed that 47 institutions have failed to remit pension contributions amounting to Sh57 billion, with public universities and government agencies among the biggest defaulters.
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According to the Retirement Benefits Authority (RBA), public institutions are responsible for Sh54.4 billion of the unremitted funds, while Sh2.4 billion is owed by private sector entities.
However, the document does not disclose the private firms involved.
The Local Authorities Pension Trust (LAPT) is the largest defaulter, having failed to remit Sh8.8 billion as of December 31, 2024. Other major defaulters include the University of Nairobi Pension Scheme, the Local Authorities Provident Fund, Moi University, and Kenyatta University staff pension schemes.
Several state corporations, sugar companies, and research institutions have also been implicated in withholding workers’ contributions.
Legal action
Committee chairman Kuria Kimani condemned the failure to remit the funds and called for legal action against the accounting officers responsible.
“There is no reason you should deduct someone’s money and fail to remit it. The accounting officers need to be taken to court for flouting the law,” Kimani said.
Karachuonyo MP Adipo Okuome questioned why the National Treasury had not intervened, saying retirees were suffering while institutions continued to withhold their pension savings.
“Is the National Treasury part of this problem?” Okuome posed.
Treasury official Samuel Kiptarus told MPs that Cabinet Secretary John Mbadi had formed a task force to investigate the pending pension bills.
He said the team was assessing the total amounts owed, progress in clearing arrears and making recommendations on how to address the issue.
Under the Retirement Benefits Act, the RBA has the mandate to direct defaulting employers to pay outstanding contributions and accrued interest within a specified period.
However, it remains unclear what action has been taken against the institutions named in the report.
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