The TelPosta Pension Scheme has successfully avoided a Sh13.4 billion pension payout following a High Court ruling that dismissed claims by former members alleging under-calculated retirement benefits. This decision concludes a protracted 15-year legal dispute that threatened the scheme's financial stability.

Background of the Dispute

The controversy began with former members asserting that their retirement payouts were undervalued. Initial claims stood at Sh7.2 billion but escalated to Sh13.4 billion due to accrued interest and elapsed time. The High Court, in a judgment delivered on July 27, 2026, supported the Retirement Benefits Appeals Tribunal's (RBAT) October 2025 decision, confirming that the scheme had calculated benefits in accordance with its Trust Deed and the Retirement Benefits Act.

The presiding judge stated, "I would agree with the 1st respondent (RBA Tribunal) and the interested parties that the instant application is an appeal disguised as a judicial review. It lacks merit, and it is for dismissal." No costs were awarded.

Financial and Operational Impact

The ruling averts a potential deficit of approximately Sh9.7 billion, as highlighted in the scheme’s 2025 actuarial report. Julius Cheptiony, the scheme’s board chairman, welcomed the verdict, emphasizing that it enhances legal clarity and strengthens confidence in the scheme's governance.

Established in 1997, the TelPosta Pension Scheme manages retirement benefits for former employees of Kenya Posts and Telecommunications Corporation and its successor entities. It operates as a closed defined benefit fund, having ceased accepting new contributions since December 2007.

The scheme currently serves over 5,000 members, paying an average monthly pension of Sh11,895 and having disbursed over Sh14.5 billion cumulatively. Its investment portfolio is heavily weighted towards real estate, with 83 percent in properties.

Asset Management Strategy

To comply with regulatory limits on property exposure (capped at 30 percent), the scheme plans to sell four major assets to the government, targeting proceeds of about Sh10 billion. These assets include:

  • TelPosta Towers
  • Gilgil GTI staff quarters
  • Two residential flats located in Makande and Bombolulu, Mombasa

This asset reallocation aims to diversify investments and ensure the scheme’s long-term financial health.