The Retirement Benefits Authority (RBA) is pursuing measures to recover Ksh65 billion in unremitted pension contributions owed to retirement benefits schemes, in a move aimed at safeguarding workers’ savings and strengthening accountability in the sector.
The outstanding amount comprises principal contributions and accrued interest from employers who deducted pension contributions from employees but failed to remit the funds to their respective schemes.
Speaking during the fourth annual Association of Retirement Benefits Schemes (ARBS) conference at Lake Naivasha Resort, RBA representative John Karia said the Authority was reviewing the Retirement Benefits Act to strengthen enforcement and introduce collaboration with the Kenya Revenue Authority (KRA) in recovering the outstanding funds.
Karia noted that a significant proportion of the unremitted contributions involved public sector employers facing financial constraints, adding that discussions were ongoing with relevant government agencies to address the challenge.
He said one of the proposals under consideration was to have statutory deductions channelled directly from the National Treasury to pension schemes and other statutory organisations instead of being processed through individual government entities.
The proposal, he added, was intended to improve the efficiency of remittances and minimise delays in transferring workers’ contributions to their respective schemes.
Karia described unremitted contributions as a persistent challenge in the sector, noting that the Authority was also working on implementing new legal provisions to enhance compliance and ensure employers fulfil their remittance obligations.
Meanwhile, Kenya’s retirement benefits sector has recorded significant growth, with assets under management reaching Sh3.1 trillion as of June 30, 2026.
The sector currently has approximately 4.1 million active contributing members, while about eight million people have been enrolled in various retirement arrangements.
However, pension coverage remains low at 26 per cent of the country’s workforce, with the majority of uncovered workers drawn from the informal sector.
Karia said existing pension products had largely been designed around formally employed workers, limiting access for people operating in the informal economy.
He said the authority was working with industry stakeholders to develop flexible and affordable products that respond to the unique saving patterns of informal sector workers.
Association of Retirement Benefits Schemes Chairperson Jane Nzau called for sustained public education and financial literacy to encourage more Kenyans to embrace retirement planning.
She observed that many people associate retirement savings with old age, overlooking the importance of starting early to build adequate financial security.
Nzau said the association was engaging the regulator and other stakeholders to promote pension products that accommodate the needs of informal sector workers.
The conference also highlighted the growing importance of post-retirement medical funds, with industry players identifying healthcare expenses as one of the major challenges facing retirees.
ARBS Vice Chairperson Daniel Mainga said regulations governing post-retirement medical funds had been introduced to encourage members to save specifically for healthcare needs after leaving employment.
He noted that the government had provided tax incentives of up to Sh15,000 monthly for contributions to post-retirement medical funds, while the tax-allowable limit for pension contributions had increased from Sh20,000 to Sh30,000 per month.
The two incentives provide a combined monthly tax-allowable contribution of up to Sh45,000 for members saving towards retirement and post-retirement medical needs.
Mainga urged workers to begin saving early and consider transferring part of their pension savings into medical funds to cushion themselves against the high cost of healthcare in retirement.
He explained that post-retirement medical funds enable retirees to access medical cover through group arrangements, which can help address the high premiums and difficulties associated with obtaining individual medical insurance at an advanced age.
The conference, held under the theme Stewardship for Sustainable Retirement Outcomes, brought together pension industry stakeholders to discuss ways of improving retirement security and placing members’ welfare at the centre of pension scheme management.
