The Technical University of Kenya (TUK) is at the centre of a storm after revelations that billions of shillings in pension contributions deducted from staff salaries were never remitted
to the retirement benefits scheme, leaving retirees and soon-to-retire employees in anguish.
On Thursday, the Senate Committee on Labour and Social Welfare grilled TUK’s Vice-Chancellor, Prof. Benedict Mutua, over the collapse of the institution’s staff pension scheme.
The committee, chaired by Ag. Chair Sen. (Rtd) Justice Stewart Madzayo, sought explanations on how employees’ retirement savings vanished under the university’s watch.
The crisis traces back to between 2009 and 2013, when TUK operated an unregistered pension scheme and instead deposited contributions into a Kenya Commercial Bank
account.
By April 2013, the account had accumulated KES 244.9 million. Shockingly, records show that by May 8 of the same year, the balance had dropped to just Sh 9.5 million weeks
before the university applied for formal registration of the Technical University of Kenya Staff Retirement Benefits Scheme (TUKSRBS).
The scheme was eventually registered in November 2013, but by then, the funds had been depleted.
Retirement Benefits Authority (RBA) Chief Executive Officer Charles Machira painted a dire picture of the scheme’s status, describing it as “catastrophic.”
He revealed that the scheme’s assets stand at only Sh 755 million against liabilities of Sh 4.2 billion, representing a funding ratio of just 17 percent.
“Anybody who has a million Kenyan shillings in accrued benefits can only be paid 170,000 shillings,” Machira said.
The High Court has since ordered liquidation of the scheme, with an official receiver now overseeing what little remains.
The revelations sparked outrage among senators, who accused university administrators of orchestrating a deliberate scheme to steal from workers.
“This was actually a scheme organized and coordinated by managers who were pilfering and stealing money from the pension fund,” said Sen. Richard Onyonka (Kisii), attending
as a friend of the committee.
Documents tabled before the committee revealed that signatories to the controversial account included top administrators, among them the then-Acting Vice-Chancellor Prof.
Francis Aduol. Senators, led by Sen. Alexander Mundigi (Embu), demanded that Aduol be summoned to explain his role in the missing billions.
Under intense questioning, Prof. Mutua conceded that the university failed in its duty.
“We accept that the law was broken,” he admitted but attributed the crisis to financial constraints and bureaucratic hurdles. His explanation, however, did little to appease
lawmakers.
Sen. Joe Nyutu (Murang’a) questioned the effectiveness of oversight bodies, including RBA, for allowing the scheme to collapse under their watch.
“When you discovered deductions were not being remitted did you make any recommendations? Where is the hope for employees who suffered these deductions?” he asked.
RBA defended its role, stating that the issue had been escalated to the University Council and the line ministry before the scheme was declared insolvent.
Senators called for a forensic audit to trace the missing funds and hold culprits accountable with Prof. Mutua expected to present a comprehensive roadmap outlining how the
university intends to compensate pensioners and protect current employees from a similar fate.
