Many Kenyans who have reached the retirement age of 60, from both private and public sectors, have yet to receive their pension benefits as the Retirement Benefits Authority (RBA) has not disbursed Sh56 billion.

State corporations, which account for approximately 19 per cent of the outstanding funds, are among the primary culprits in the delayed remittance, exacerbating financial hardships amid a high cost of living and economic challenges.

Jackson Kutu, representing the CEO of RBA before the National Assembly Finance and National Planning Committee, said that counties, public universities, and agencies in the sugar and water sectors have failed to comply with the required remittances. He stated that the RBA has initiated additional training for counties and institutions, aligning with available budgets, to address these delays.

He emphasised that universities and other institutions claim they have not received formal petitions from the government, contributing to the impasse.

“So, what we have done, we have to begin additional tuition for the counties, when there is a budget, we have to, from the universities where we take them, and we are expecting that we’ll be able to deal with that, because they are saying that they have not received a petition from the government,” he said.

Deducting pension contributions

To counter this issue, the RBA is now considering deducting pension contributions directly from the source and is seeking the national government’s support to implement this measure. Kutu stressed that government intervention is essential in addressing financial mismanagement within these institutions.

He noted that if non-compliant government bodies can be compelled to remit funds as required, the problem would be largely resolved. The RBA is in the final stages of compiling a report on the issue, which will soon be shared with affected universities. Kutu further revealed that although institutions receive disbursements from the government, they often allocate the funds elsewhere, resulting in pension payment defaults.

This misallocation not only delays payments to retirees but also undermines financial stability for those who depend on their pensions. Kimani Kuria, chairman of the National Assembly Finance and National Planning Committee, condemned the practice, labelling it as “theft.”

He pointed out that pension contributions are deducted from employees’ salaries at the gross level, yet when retirees seek their benefits, they find that the money is unavailable.  He noted that the committee receives daily complaints from pensioners who are struggling to access their rightful funds.

The persistent failure of state institutions to remit pension contributions as required raises concerns about accountability and financial governance.  Without urgent intervention, thousands of retirees will continue to face unnecessary financial distress despite having contributed to their pension schemes throughout their careers.

The RBA’s proposal to deduct funds at the source, coupled with stricter oversight, could provide a lasting solution to this ongoing crisis.

“We need the support from the government to deal with the financial mismanagement in that. So, there’s an attempt, and we are knowing where, if the government institutions which are not remitting competitions can be sorted out, then the problem will be gone. Already we are being informed of this, and I think the report is almost ready to be sent to the universities,” Kuria said.

He added that the institutions actually receive the disbursements but they allocate them to other factors leading to the defaults. “We have an issue because we are getting calls from pensioners everyday, these funds are being deducted directly from the employees’ salaries but again when it comes to paying them, you find that there is no money,” Kuria said.

This comes at the backdrop of elderly Kenyans having been grappling with the issue facing hardships to get access to their claims with some travelling from their rural homes to follow up on the issue at the Bima house. Currently the number of pending claims stands at 144 from 318, most of them have been mentioning system issues and the sluggish pace of officials at the facility to provide services effectively.

Claim’s settlements

Forty-eight retirees have been waiting for their claim’s settlements for between 16 and 25 year. Some of the claimants die while waiting for their claims to be settled, passing down the burden to their loved ones. This is despite them going through tough economic times that has been characterised by the shrinking of the disposable income. Mugambi Ngeera an elderly Kenyan, has been following up on the issue of gratuity for close to 30 years now.

“i was following up on my late wife’s gratuity, who died in 1997, up to date I’m still waiting for the settlement. Whenever I go to the Huduma centre I’m told the process has been made only waiting for payment, reason being the treasury doesn’t have money,” he expressed his agony.