RBA Pushes for Early Retirement Planning, Flags KSh 65 Billion Pension Remittance Gap

By Wasike Elvis 

The Retirement Benefits Authority (RBA) has intensified calls for Kenyans to embrace early retirement planning, even as it raised alarm over nearly KSh 65 billion in unremitted pension contributions by public institutions.

Speaking after a stakeholder engagement forum, RBA Director of Market Conduct and Industry Development Tom Kiptanui said the Authority is stepping up public awareness campaigns to encourage a culture of saving and long-term financial planning, particularly among young professionals.

Kiptanui noted that while many Kenyans remain focused on active employment and income generation, insufficient attention is given to life after retirement—a gap that continues to expose retirees to financial vulnerability.

“Retirement planning is not something to be postponed. The earlier individuals begin saving and investing, the better positioned they are to live comfortably after their working years,” he said.

He pointed out that the government has already put in place incentives to encourage savings, including tax relief on pension contributions. Individuals can benefit from tax-free savings thresholds, including contributions toward post-retirement medical schemes of up to KSh 15,000, aimed at cushioning retirees against healthcare costs.

Beyond financial preparedness, Kiptanui emphasized the importance of psychological readiness, noting that many workers struggle to adjust once they exit formal employment.

“Retirement is often misunderstood. It is not a punishment or the end of productivity, but rather a transition into another phase of life. Preparing psychologically is just as important as financial planning,” he explained.

He urged professionals—especially journalists and young workers engaged during the forum—to take advantage of their current earning years to build sustainable retirement plans, stressing that time remains one of the most valuable assets in wealth creation.

“It is one thing to receive information, but another to act on it. We are urging Kenyans to take deliberate steps now to secure their future,” he added.

However, even as the Authority promotes savings, it raised serious concerns over persistent non-remittance of pension deductions by several employers, particularly in the public sector. Institutions affected include parastatals, universities, and county governments.

According to Kiptanui, the total amount of unremitted pension contributions has now risen to approximately KSh 65 billion—funds that have already been deducted from employees but not transmitted to pension schemes.

“This is a major concern because it directly affects workers when they retire. These contributions are meant to secure their future, yet delays in remittance create uncertainty and hardship,” he said.

The RBA noted that the situation has placed significant pressure on pension scheme trustees, who are tasked with ensuring that retirees receive their benefits on time despite the funding gaps.

To address the challenge, the Authority is engaging both government and institutional stakeholders to develop enforcement mechanisms that will ensure compliance and accountability among employers.

Among the proposed solutions is the involvement of the Kenya Revenue Authority (KRA) in the recovery process. Kiptanui explained that integrating KRA’s enforcement capabilities could help streamline collection of outstanding contributions, treating them similarly to tax arrears.

“We are proposing stronger enforcement measures, including bringing in agencies such as KRA, to ensure that these funds are recovered efficiently and remitted to the respective pension schemes,” he said.

Additionally, the Authority is advocating for policy reforms that will compel employers to prioritize pension remittances and face stricter penalties for non-compliance.

Kiptanui reaffirmed that under Kenyan law, retirees are entitled to receive their pension benefits within 30 days of retirement, a provision the Authority is keen to uphold.

He assured stakeholders that ongoing engagements with employers and policymakers are aimed at safeguarding contributors and restoring confidence in the retirement benefits sector.

“We do not want to see retirees suffer due to delays that can be avoided. Our goal is to ensure that every Kenyan who has contributed to a pension scheme receives their dues promptly and in full,” he said.

The forum brought together journalists and industry stakeholders, providing a platform for discussions on retirement planning, sector challenges, and policy reforms. Participants were encouraged to play a role in raising awareness and educating the public on the importance of saving for retirement.

As Kenya continues to expand its workforce and pension coverage, the RBA maintains that strengthening compliance, improving financial literacy, and fostering a savings culture will be critical in securing the long-term well-being of retirees.

The Authority reiterated its commitment to building a robust and sustainable retirement benefits sector that not only protects workers’ savings but also contributes to the country’s broader economic stability.