KENYA’S retirement benefits sector has grown significantly, with assets under management reaching Sh2.81 trillion as at December 2025.
However, the persistent failure by employers to remit pension contributions deducted from workers’ salaries threatens to undermine this progress and jeopardise employees’ financial security in retirement.
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 growing backlog raises serious concerns about employers’ compliance with the law and the protection of workers’ savings.
Employers are required to remit pension deductions by the 10th day of the following month. Yet some continue to withhold these funds to address cash-flow challenges, effectively using employees’ retirement savings as interest-free working capital.
Pension contributions are not discretionary business expenses. Once deducted from employees’ salaries, the money belongs to the workers and must be transferred to the relevant retirement benefits schemes within the stipulated timelines.
Delayed remittances have significant financial consequences. Every month that contributions remain unremitted represents potential lost investment income, reducing the retirement benefits workers would otherwise accumulate over their working lives.
The impact can be particularly severe for employees approaching retirement, who may face delays or reduced benefits despite years of contributions reflected on their payslips.
The problem also reflects a wider challenge involving unremitted statutory deductions, which can leave workers unable to access essential services, including health insurance and Sacco credit facilities.
While businesses may face financial pressures, these cannot justify withholding employees’ savings. Employers must prioritise their statutory obligations and ensure pension contributions are remitted in full and on time.
Protecting retirement savings is essential to maintaining public confidence in Kenya’s pension system.
Stronger compliance, accountability and enforcement are necessary to ensure workers receive the benefits they have earned.
The writer is the chief executive officer of the Retirement Benefits Authority
