Senators reject plan to delay TUK retirees’ pensions until 2030

Senators have rejected a proposal by the Ministry of Education to clear Sh2.8 billion in pension arrears owed to retired staff of the Technical University of Kenya over three years, terming the delay unfair, inhumane and unjust to elderly pensioners.

Appearing before the Senate Labour and Social Welfare Committee, Higher Education Principal Secretary Beatrice Inyangala said a reconciliation exercise had established that Sh2.85 billion remains unremitted to the TUK Staff Retirement Benefits Scheme (SRBS), which is currently under liquidation.

Dr Inyangala told senators the government plans to settle the pension debt in phases while also pursuing the establishment of a new pension scheme for staff.

She said the employer, the State Department for Higher Education, would allocate funds in the 2025/26, 2026/27 and 2027/28 financial years to offset the debt owed to the wound-up scheme.

But senators sharply criticised the proposal, saying the retirees had already waited too long and could not be expected to hold on until 2030 to access their dues.

“You are telling somebody who is already a pensioner to wait until 2030, are we so heartless? These are retirees, they have nothing. Why can’t you commit that you will clear this pension in the next financial year?” posed Murang'a Senator Joe Nyutu.

Under the proposed payment plan, the State Department had offered to release Sh500 million in the 2025/26 financial year, while maintaining that the formation of a new scheme remains a priority alongside the conclusion of the liquidation process.

Lawmakers dismissed the amount as grossly inadequate.

“Most of these pensioners are over 70 years old. Spreading payment over three years is essentially saying you want them to die without enjoying their pension. The Sh500 million is too little,” said Nyamira Senator Okong'o Omogeni.

The pension crisis at TUK has been linked to longstanding structural funding gaps dating back to the institution’s transition from the Kenya Polytechnic to a university.

Dr Inyangala explained that when the institution transitioned, it inherited significant unfunded liabilities. She said the university absorbed 652 staff members, but from July 1, 2009, the government stopped funding salaries for lecturers previously paid through the Teachers Service Commission, while continuing to provide capitation at polytechnic levels.

This, she said, created an immediate and sustained structural deficit estimated at Sh13 billion between 2009 and 2025.

“The mismatch between capitation and payroll requirements has arisen from limited revenue capacity, the obligation to continue meeting statutory and third-party deductions, as well as capitation consistently below payroll requirements,” she told the committee.

Lack of seriousness 

In a petition before the Senate, University Academic Staff Union (Uasu) TUK chapter secretary Fred Sawenja warned that retirees and staff nearing retirement risk losing their lifetime pension savings despite years of public service.

He said the problem of non-remittance had long been known by the Ministry of Education, but had not received the urgency and commitment it deserved.

“The problem we are having is that this matter is not being given the seriousness it deserves and the commitment it requires,” said Mr Sawenja.

He added that union members had watched colleagues retire into hardship, with some dying in poverty before accessing their benefits.

“Going by what we are seeing happening to our members, including dying in poverty, we would wish this matter to be brought to a conclusion much faster. If the funds can be availed in the next financial year, that will be good for the pensioners,” he said.

The TUK Staff Retirement Benefits Scheme was established on July 1, 2009 as a defined contribution pension scheme to provide retirement benefits, death-in-service relief and pension entitlements for employees of the university and other eligible members.

It was later registered by the Retirement Benefits Authority (RBA) on November 12, 2013.

However, the scheme was placed under interim administration in November 2015 after failing to meet mandatory requirements under the Retirement Benefits Authority Act, 1997, including minimum funding thresholds.

It later moved into formal liquidation following a winding-up order issued on July 5, 2024.

The scheme was declared insolvent due to multiple regulatory and operational failures, including failure to comply with the mandatory 100 per cent minimum funding level required under pension regulations.

The Committee has directed that Cabinet Secretary of Education Julius Migos and his Treasury counterpart John Mbadi appear before it to arrive at a faster and more realistic settlement plan to spare retirees further suffering.

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