The Technical University of Kenya (TUK) has been given 30 days to pay a Sh6.43 billion debt owed to its current and former employees in unpaid pension contributions and accumulated interest, deepening the financial crisis at the cash-strapped institution, which is already struggling with Sh12 billion in pending bills.
Lawyers representing the staff retirement benefits scheme, with over 1,850 members, have threatened legal action if the university fails to settle the debt by December 7, 2026.
The claim comprises Sh3.04 billion in unpaid contributions and Sh3.39 billion in interest, which continues to accrue until full payment.
The lawyers, Long’et & Mumo LLP, sent the November 6 demand letter to the Vice-Chancellor on behalf of the pension scheme, which is currently under liquidation.
They cited a trust deed and rules dated May 2013, which governed the relationship between the university, the pension scheme and its members, setting out their respective obligations and the procedures for collecting, remitting and accounting for pension contributions.
Under the arrangement, the university was to contribute 20 per cent of pensionable salaries, while staff contributed 10 per cent. The university was to collect and remit both amounts.
The Technical University of Kenya campus along along Haile Selassie Avenue in Nairobi.
Photo credit: File | Nation Media Group
“The sponsor covenanted to collect and remit to our client monthly contributions, being 20 per cent of pensionable emoluments due from itself as employer and ten per cent from its employees who are our client’s members,” the lawyers state.
Contributions were due before the 10th day of each month. The letter says unpaid amounts attracted interest and were recoverable from the university as a civil debt.
The accompanying schedule traces arrears to July 2010. It records Sh3.48 billion in contributions and Sh441.5 million in payments, leaving principal arrears of Sh3 billion.
The letter says the University failed to remit the contributions and interest continued to accumulate, reaching Sh3.38 billion by June 30, 2026, and bringing the total claim to Sh6.43 billion. The schedule says interest was compounded monthly using annualised 91-day Treasury bill rates.
The lawyers demand payment within 30 days, warning that failure would trigger proceedings to recover the debt, further interest and legal costs. They cite the scheme rules, the Retirement Benefits Act and general law.
The letter was copied to the Retirement Benefits Authority and the scheme's members through their trade unions.
The demand comes as liquidation leaves more than 1,800 current and former employees uncertain about their retirement savings.
A Senate report tabled last month found that the scheme had receivables of Sh6.83 billion as at April 2026, against available assets of Sh907 million. It identified about 1,850 affected members, including 1,299 serving employees and 551 deferred members.
The Senate committee said available funds could initially meet only about 13 per cent of members’ accumulated benefits. A member entitled to Sh1 million could receive about Sh130,000, based on the report’s figures.
In a September 17 update, the university said the liquidator had announced Sh906.6 million was available for distribution. Members were to receive 12.38 per cent of their benefits in two tranches because the money was held in Treasury bills, equities and deposits.
The scheme entered statutory administration in November 2015. The High Court ordered its liquidation in July 2024, and the liquidator was appointed in January 2025.
The Senate report found that the university deducted pension contributions from employees’ salaries for more than 15 years but failed to remit both staff and employer contributions.
It also reported that some money deposited with a local bank, the scheme’s custodian, was diverted to university operations, contrary to pension rules.
The committee cited governance failures, including irregular trustee meetings and weak regulatory enforcement. It recommended that the Directorate of Criminal Investigations (DCI) and Anti-Corruption Commission investigate the failure to remit more than Sh4.1 billion in pension contributions and the decisions made by university officials.
When the RBA intervened in 2015, the scheme had assets of Sh133.6 million against liabilities of Sh723 million, according to the Senate report.
The RBA filed a court case in 2017 seeking to have the scheme wound up after concerns emerged over its financial position and failure to meet its pension obligations. The High Court granted the petition on July 5, 2024, ordering the scheme's liquidation after finding that it was insolvent and unable to meet its liabilities.
The university told senators that underfunding and cash-flow problems had affected its ability to meet financial obligations. It reported pending bills of Sh12.99 billion as at January 31, 2025, saying funding shortfalls forced it to prioritise net salaries over statutory deductions.
However, the Senate said financial difficulties did not justify retaining money deducted for workers' retirement.
TUK Vice-Chancellor said in September that the university wanted a new pension scheme. He said it had petitioned the Education Ministry and Treasury over commitments in a 2024 return-to-work agreement.
The agreement was signed by staff unions, the university council and the Education Ministry after a strike paralysed learning at the institution for more than a month.
