Nairobi — Education Cabinet Secretary Julius Ogamba has acknowledged the severe pension fund crisis at the Technical University of Kenya (TUK), highlighting a Sh4.3 billion shortfall as part of the university's Sh12.9 billion debt burden.
Appearing before the National Assembly Education committee Wednesday, he detailed the government's plan to address the pension issue and other financial challenges affecting the institution.
University Unions have decried that delayed salaries have compounded financial challenges for TUK workers, with unions pointing to the non-remittance of statutory and third-party deductions as a key issue.
Loan repayments have remained outstanding for more than ten months, exposing workers to prosecution, blacklisting by credit reference bureaus, and auction threats.
"To stabilize the university's finances, the Ministry of Education has partnered with TUK to implement a Strategic Intervention Plan (STIPA), which includes Direct payroll support as the government will provide Sh145 million from January to June 2025 to ensure timely salary payments," Ogamba stated.
As an interim measure, the university has prioritized the immediate settlement of December 2024 salaries and advance payments for January and February 2025 to cushion affected staff. However, these efforts fall short of clearing the massive pension backlog.
Pension Arrears
The higher learning institution's financial struggles have directly impacted on its retired employees, who have been left without access to their benefits. In response, the university has committed to a repayment plan spanning multiple financial years to settle pension arrears.
"TUK has pledged to provide funds from the 2025/2026 financial year through to 2031/2032 to settle outstanding liabilities under the wound-up staff retirement scheme," Ogamba stated.
This is even as investigations are ongoing to establish culprits behind the collapse of the Staff Retirement Benefits Scheme (SRBS), which was dissolved in 2017 following a court ruling, resulting in the loss of Sh5.3 billion in savings.
The Education Cabinet Secretary revealed by the time the fund was wounded it only had Sh590 million pointing to outright theft of the staff pension kitty.
"There is something not right because by the time the pension was being wounded it was Sh590 million. Thats why we need to know exactly what was the issue," he noted.
For retired staff members of the Technical University of Kenya (TUK), the issue was financial security in their later years has turned into a painful waiting game. With Sh4.3 billion in pension arrears, many retirees have been left without the benefits they spent years working for.
Lawmakers' concern
The pension scheme's collapse has left thousands of current and former employees uncertain about their future. Many expect to retire with financial stability but are now struggling.
"The pensioner lost Sh5.3 billion when the two pension schemes were wounded up in in unclear circumstances. What actions have you taken to ensure that people behind this are brought to book?" committee chair Julius Melly posed.
"Are you telling us that the government has knowingly allowed universities to default on pension payments? This is an illegality that must be addressed," Mandera South MP Abdi Ebrahim stated.
Teso South MP Mary Emase raised concerns on a trend within higher learning institutions where pensioners lose their funds over unclear circumstances with no punitive actions taken.
"We have received reports of two cases where pensioners have lost their contributions to the pension scheme. We need to know how the Sh5 Billion got lost," she stated.
Reviving Plan
Currently, the university has formally requested approval from the Retirement Benefits Authority (RBA) to establish a new pension scheme for staff from all three unions. This measure, according to the education cabinet secretary, aims to secure the future financial stability of employees.
"On February 24, 2025, TUK formally requested the RBA to authorize the establishment of a new staff benefit scheme," Ogamba confirmed.
The government has also outlined a strategy to compensate affected staff members by prioritizing payments for December 2024 salaries and advancing funds for January and February 2025.
"A detailed repayment plan has been put in place, including immediate settlement of December 2024 salaries and advance payments for January and February 2025," he said.
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Moreover, the government has pledged that a phased approach will be used to clear arrears related to pension benefits, union dues, central remittances, and salary arrears over the coming years.
Beyond pension obligations, TUK is grappling with other financial burdens, including statutory deductions amounting to Sh6.7 billion, Bank, SACCO, and insurance deductions totaling Sh305 million and staff claims amounting to Sh398.8 million
The Education Cabinet Secretary forensic audit has also been planned to verify the actual figures of the university's financial liabilities.
"The Ministry of Education will channel conditional grants to bridge the budget gap, ensuring financial stability for TUK in the long term," Ogamba stated.
The government's long-term strategy includes injecting Sh1.2 billion in 2025/2026, followed by progressive allocations up to 2032, ensuring that pensioners receive their dues in phases.
"We do not require the entire Sh4.3 billion today because not all pensioners need their full amount at once. We will ensure that those retiring receive their money while we rebuild the pension fund gradually," Ogamba explained.
