Senate targets Technical University of Kenya bosses, banks in Sh4.3 billion pension scandal

Negligence, weak oversight, and misuse of employee contributions have been cited as the main causes of the collapse of the Technical University of Kenya (TUK) Staff Retirement Benefits Scheme (TUKSRBS), senators said on Thursday.

The Senate Committee on Labour and Social Welfare is investigating the matter following a petition by the University Academic Staff Union (UASU) TUK Chapter, which sought justice for staff whose salary deductions were allegedly not remitted to the pension scheme.

At least Sh4.3 billion in staff contributions remain unaccounted for, prompting the committee to summon senior university officials and regulators for questioning.

“The committee should help us identify those officers in the Technical University of Kenya who committed acts or omissions that led to the collapse of the scheme. If found responsible, they should be made to account, and the committee should assist in recovering the funds for members,” UASU TUK Chapter Secretary Fred Sawenja said.

Introduce safeguards

He urged Parliament to introduce safeguards to prevent similar collapses of staff retirement benefit schemes in public universities.

Appearing before the committee, TUK Vice Chancellor Benedict Mutua admitted that the university had faced financial challenges that hindered remittance of employee deductions.

“It is very clear what members were supposed to be given,” Mutua said, explaining that an audit had been carried out and that Mr Logette of Longar Advocates was appointed by the court as the scheme’s liquidator in July 2024.

“The liquidator has given a clear roadmap on how much each person is supposed to be paid. We can’t say money was stolen because the records are very clear,” he added.

Evading accountability

However, senators expressed dissatisfaction, accusing the university of evading accountability through technical explanations.

Kilifi Senator Stewart Madzayo pressed the university to explain how it planned to clear the unremitted deductions.

“The liquidator is liquidating the benefit scheme. But central to this petition are the unremitted deductions from employee salaries. What plans does the university have to ensure these funds are made available to the scheme?” he asked.

Mutua said the university was working with the Ministry of Education to identify and pay all outstanding dues, including interest.

“There are plans in place to ensure these monies are paid once the final audit is confirmed. The payments will include all penalties and interest, not just the principal amount,” he said.

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• Senate targets Technical University of Kenya bosses
• banks in Sh4.3 billion pension scandal

Devastating human impact

But Senator Madzayo remained unconvinced, highlighting the devastating human impact of the pension scandal.

“We are talking about people who spent their youth working for this country and now face economic death at their doorstep. We must ensure their interests are protected,” he said.

Murang’a Senator Joe Nyutu also disputed Prof Mutua’s claim that no funds were lost.

“This money is considered lost. We are talking about retired workers who are owed billions. We need to hear directly from the liquidator whether the funds are truly recoverable,” he said.

Mutua maintained that members should not lose hope, assuring that all computation data and member statements were available to facilitate payments once liquidation is complete.

Retirement Benefits Authority (RBA) Chief Executive Officer Charles Machira, who also appeared before the committee, painted a bleak picture of the scheme’s financial status.

Total assets

He told senators that the scheme had 1,850 members—1,299 active and 551 deferred or retired—with total assets worth only Sh775 million.

He further revealed that the university owed the scheme about Sh4.3 billion in unremitted contributions.

Machira disclosed that as early as 2013, RBA discovered employee deductions were being deposited into a KCB Bank savings account that the university later used to fund its operations.

A report by the former service provider, Alexander Forbes (now Zamara), showed that only Sh9.5 million remained in the account out of an expected Sh220 million.

“This was an illegality,” he said, adding that RBA placed the scheme under internal administration through Octagon Pension Services in 2017 and later petitioned the High Court to wind it up.

“The more the scheme remained open, the more members were losing their savings. Considering the size of unremitted contributions, liquidation was the only way to protect members,” he said.

Beyond his control

Former Vice Chancellor Francis Aduol, now serving as a Commissioner at the Independent Electoral and Boundaries Commission (IEBC), defended his administration, arguing that the financial crisis was beyond his control.

“The position being presented by RBA, that the university willfully refused to remit money, is not true. The funds from the government were insufficient to pay salaries, taxes and pensions simultaneously. We had to prioritise keeping the university running,” he said.

Senator Nyutu, however, dismissed his explanation.

“You cannot defend using employees’ retirement savings to run the university. That is a breach of fiduciary duty and public trust,” he said.

Negligence, poor oversight

After hours of questioning, Committee Chair, West Pokot Senator Julius Murgor, concluded that negligence, poor oversight, and misuse of employee funds had led to the scheme’s collapse.

“This committee will not accept delegated testimony from junior officers. We want the CEOs themselves to explain where the money went,” he said.

He directed the chief executives of CPF Financial Services, KCB Bank, and Octagon Pension Services to appear before the committee on November 21, 2025, warning that failure to do so would attract sanctions under the Parliamentary Powers and Privileges Act.

“The committee stands with the workers whose savings disappeared. We will pursue the truth until every cent is recovered and those responsible are brought to account,” Murgor said.