KENYA'S retirement benefits sector has grown significantly, with assets under management reaching Sh2.81 trillion as at December 2025.
However, this progress is being undermined by the persistent non-remittance of pension contributions deducted from employees' salaries.
The law requires employers to remit pension deductions by the 10th day of the following month.
Yet many continue to withhold these funds to address cash-flow challenges, effectively using workers' retirement savings as interest-free working capital.
The scale of the problem is alarming. As at March 31, 2026, outstanding unremitted pension contributions stood at Sh67.9 billion, up from Sh57 billion at the end of 2024, representing a 19 per cent increase.
This trend threatens the integrity of Kenya's retirement benefits system.
Pension deductions are not a discretionary expense; they are the property of employees.
Employers who deduct and fail to remit these funds are violating workers' rights and jeopardising their financial future.
Every month that contributions remain unremitted means lost investment income and reduced retirement benefits.
For workers approaching retirement, delayed remittances can result in postponed or incomplete pension payments despite years of deductions reflected on their payslips.
The challenge extends beyond pensions. Similar failures in remitting statutory deductions have left workers without health insurance coverage and denied access to Sacco loans and other financial services.
While budget constraints may exist, they cannot justify the diversion of employees' savings.
Pension contributions belong to workers and must be remitted in full and on time.
The writer Retirement Benefits Authority CEO
