The Retirement Benefits Authority has proposed stricter measures to stop the growing problem of unpaid pension contributions, warning that government departments and other public institutions could lose access to funds from the National Treasury if they fail to comply.
The regulator wants to strengthen enforcement and make non-remittance a high-risk issue for any sponsor of retirement schemes.
In the new proposals, RBA seeks to restore a system where public agencies must show proof of full compliance before they can access statutory disbursements.
“The RBA proposes to reinstate the statutory clearance mechanism whereby sponsors may only access disbursements or statutory funds upon proof of full compliance with remittance obligations to pension schemes,” the policy document states. The authority also recommends direct recovery of unpaid contributions through garnishee orders and other enforcement tools.
A key aspect of the proposals is to involve the Kenya Revenue Authority in tracking and collecting unremitted pension deductions. This would include giving KRA the power to issue notices to account holders with unpaid contributions and to attach bank accounts of defaulting employers.
RBA also intends to hold accounting officers personally liable for failing to remit funds, while increasing penalties and interest charges to make them more effective.
RBA data shows the total unremitted pension contributions reached Sh72 billion by June 2025, up from Sh57 billion the previous year—a jump of 26.31 per cent. The regulator attributes the rise mainly to county governments and quasi-government entities such as public universities and struggling sugar mills.
RBA Chief Executive Officer Charles Machira linked the surge to poor financial discipline within public institutions.
“Yes, the figure has grown, and we agree, it is not that we are not enforcing mechanisms of remittance of the contributions. Why does this happen? It is purely indiscipline because if you look at it from a government point of view, all government agencies have budgets that they prepare on an annual basis,” he explained in an earlier interview. “Those budgets are remitted to the National Treasury for approval or through their line ministry.”
Currently, late remittance attracts a penalty of Sh20,000 or five per cent of the outstanding amount per month, whichever is higher. RBA says the ongoing rise in unpaid contributions shows that existing fines are not enough to stop sponsors from diverting funds away from pensions.
