The Retirement Benefits Authority (RBA) is pursuing the recovery of Sh65 billion in unremitted pension contributions, targeting employers who deducted money from workers’ salaries but failed to transfer it to their respective retirement schemes.
The outstanding amount comprises unpaid principal contributions and accrued interest, with the regulator considering tougher enforcement measures to compel employers to meet their obligations.
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 and exploring collaboration with the Kenya Revenue Authority (KRA) to recover the funds.
Karia revealed that a significant portion of the arrears involved public sector employers facing financial difficulties.
He said discussions were underway with government agencies to address the problem, including a proposal to have statutory deductions transferred directly from the National Treasury to pension schemes.
Meanwhile, Kenya’s retirement benefits sector has grown to Sh3.1 trillion in assets under management as of June 30, 2026, with approximately 4.1 million active contributing members and eight million people enrolled in various retirement arrangements.
Despite the growth, pension coverage remains low at 26 per cent of the workforce, largely due to limited participation by informal sector workers.
Karia said the regulator was working with industry stakeholders to develop affordable and flexible pension products tailored to the saving patterns of people in the informal economy.
ARBS Chairperson Jane Nzau called for increased public education and financial literacy to encourage Kenyans to start saving for retirement early.
The conference also highlighted the importance of post-retirement medical funds in helping retirees meet healthcare expenses.
ARBS Vice Chairperson Daniel Mainga said contributions to post-retirement medical funds attract tax relief of up to Sh15,000 monthly, while the allowable tax relief limit for pension contributions has increased from Sh20,000 to Sh30,000.
This brings the combined monthly tax-allowable contribution to Sh45,000 for workers saving towards retirement and future medical expenses.
Mainga urged workers to start saving early and consider allocating part of their pension savings to medical funds, which provide access to group medical cover and help retirees avoid the high costs of individual insurance.
The conference was held under the theme Stewardship for Sustainable Retirement Outcomes, bringing together industry players to discuss ways of strengthening pension management and improving retirement security.
