Technical University of Kenya under Senate scrutiny over Sh800 million pension debt
The Retirement Benefits Authority (RBA) told the committee that TUK stopped complying with the required contributions in 2013, and since then, no proper action has been taken to fix the issue.
The Technical University of Kenya (TUK) is facing intense scrutiny from the Senate over its failure to remit over Sh800 million in staff pension contributions spanning more than a decade.
The Senate Labour and Social Welfare Committee, led by West Pokot Senator Julius Murgor, heard that the university has not remitted statutory and third-party deductions to the staff retirement scheme for over a decade.
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The Retirement Benefits Authority (RBA) told the committee that TUK stopped complying with the required contributions in 2013, and since then, no proper action has been taken to fix the issue.
Charles Machira, the CEO of RBA, said the university’s continued failure to remit funds forced the authority to go to the High Court to ask for the retirement scheme to be shut down.
"The liquidator now has a legal duty to collect the contribution arrears from the scheme's sponsor (TUK) and pay the outstanding benefits to the scheme's members," he said.
The RBA also explained that under the original rules, from July 2000 to June 2013, employees were contributing 7.5 percent of their salary while the employer contributed 15 percent.
From July 2013, these were supposed to increase to 10 percent and 20 percent, respectively. However, TUK continued to remit only at the earlier rate, falling behind on the required payments.
TUK Vice-Chancellor Prof Mutua, in his defence, said the university is facing major financial problems.
He said they are only receiving Sh90 million from the National Treasury, far below their actual need of Sh240 million. This has made it impossible to meet all financial obligations, including pension remittances.
"We are not able to remit statutory deductions. We are only paying net salaries to our staff. This is because we require Sh240 million. We are now spending Sh150 million, yet the National Treasury only gives us Sh90 million as capitation. We cannot because we have inadequate funds," Prof Mutua said.
The Senate committee is now expected to follow up on the matter and push for accountability.
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