The Retirement Benefits Authority (RBA) has launched a tough new drive to recover more than KSh72 billion in unpaid pension contributions, introducing stricter penalties and enforcement measures aimed at institutions that have deducted retirement deductions from workers’ pay but failed to remit them to pension schemes.

The crackdown responds to a sharp increase in unremitted pension contributions, a problem that has eroded confidence in Kenya’s retirement benefits system and left millions of contributors at risk.

RBA data show that by June 2025, pension deductions that were collected but not forwarded to retirement schemes had climbed to KSh72 billion, up from KSh57 billion the previous year, a 26.3% increase that highlights persistent compliance gaps across sectors.

The vast majority of these unpaid contributions, nearly 98%, are linked to county governments, cash-strapped public universities, sugar factories and other quasi-government agencies that have struggled to meet statutory remittance obligations.

Under the proposed regulatory changes, RBA aims to strengthen its enforcement toolkit to compel compliance and protect workers’ retirement savings. Among the measures:

Reinstating the statutory clearance mechanism, which prevents employers from accessing government disbursements or statutory funds unless they prove full compliance with pension remittance obligations.

Granting RBA authority to directly recover outstanding contributions, including the power to issue garnishee orders that would attach defaulters’ bank accounts.

Holding accounting officers personally responsible for defaults, with enhanced penalties and interest charges that go beyond the current routine fines.

The reforms are designed to deepen accountability and discourage the long-standing practice of deducting pension contributions from employees’ salaries but reallocating those funds to cover other costs, a phenomenon industry insiders link to indiscipline and poor fiscal management in some public institutions.

Kenya’s pension sector has struggled with compliance issues for years. In addition to the RBA’s latest data, previous reports show that state entities have left significant pension contributions unpaid, including the government’s failure to remit KSh1.2 billion to civil servants’ pensions, which auditors warned could erode retirement returns for workers.

Enforcement efforts by regulators such as the Kenya Revenue Authority have previously yielded penalties for employers failing to remit statutory dues.

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