The Technical University of Kenya (TUK) has come under heavy criticism after revelations that its staff retirement benefits scheme collapsed, leaving employees and pensioners financially stranded. The Senate Committee on Labour and Social Welfare grilled the university’s top leadership on Thursday, September 25, over how the loss occurred and who was responsible.
Vice-Chancellor Prof. Benedict Mutua faced tough questioning from committee chair Kilifi Senator Stewart Madzayo and other members. Lawmakers pressed him to explain how pension deductions were collected from staff for years but never remitted to the scheme. Instead, between 2009 and 2013, TUK operated an unregistered scheme and deposited the funds into a non-compliant savings account at Kenya Commercial Bank.
By April 2013, that account held Ksh244.9 million. Just a month later, on May 8, the balance had dropped drastically to Ksh9.5 million. It was only on May 29, after the funds had been drained, that the university applied to register the Technical University of Kenya Staff Retirement Benefits Scheme (TUKSRBS). The scheme was formally registered in November 2013.
The Retirement Benefits Authority (RBA) Chief Executive Charles Machira painted a grim picture of the scheme’s state. “Anybody who has a million Kenyan shillings in accrued benefits can only be paid 170,000 shillings,” he said, describing its funding ratio at just 17 percent. The High Court has since ordered the scheme liquidated after ruling that its Ksh755 million in assets could not cover liabilities of Ksh4.2 billion. An official receiver has been appointed to oversee what remains.
Senators accused the university’s administration of orchestrating a scheme to loot pensioners’ savings. “This was actually a scheme organized and coordinated by managers who were pilfering and stealing money from the pension fund,” Kisii Senator Richard Onyonka declared. Records presented showed that senior officials, including then-Acting Vice-Chancellor Prof. Francis Aduol, were signatories to the controversial account, raising suspicion of collusion at the highest levels. Embu Senator Alexander Mundigi insisted that Prof. Aduol must appear before the committee.
Under pressure, Prof. Mutua admitted wrongdoing. “We accept that the law was broken,” he said, attributing the failure to remit funds to financial challenges and bureaucracy.
Murang’a Senator Joe Nyutu directed sharp criticism at oversight institutions, questioning RBA’s role. “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 responded that the issue had been reported to the ministry and University Council before the scheme was declared insolvent.
Lawmakers now want a full forensic audit to uncover how billions disappeared and to ensure accountability. Prof. Mutua is expected to submit a detailed plan on how TUK will compensate affected pensioners and secure the future of staff nearing retirement.
By Risper Akinyi
