Kenyan workers face growing risks to their retirement savings as outstanding pension deductions soar to Sh85.2 billion in 2025, according to data from the Retirement Benefits Authority (RBA).

These unpaid contributions represent funds deducted from employees’ salaries but not yet remitted to their pension schemes, limiting the investment potential and long-term growth of their retirement savings.

Rising Unpaid Contributions

The total unpaid pension deductions increased from Sh69.4 billion in 2024 to Sh85.2 billion last year. Most arrears have been overdue for more than 30 days, with such long-term delays climbing to Sh73.1 billion in 2025, nearly tripling the Sh25.35 billion recorded in 2021.

Contributions unpaid for less than 30 days slightly declined from Sh14 billion to Sh11 billion, indicating that the bulk of the problem lies with prolonged delays.

Breakdown by Scheme Type

  • Occupational pension schemes hold the largest share of arrears at Sh63.8 billion.
  • Statutory schemes have Sh5.2 billion in overdue contributions.
  • Umbrella schemes account for Sh4.2 billion.

Defined contribution schemes are particularly affected, with Sh66.5 billion in unpaid contributions over 30 days, split between pension schemes (Sh44.3 billion) and provident funds (Sh28.8 billion).

Government Response and Enforcement

The government is intensifying efforts to address this issue. Proposed amendments to the Kenya Revenue Authority (KRA) Bill would empower KRA to recover unpaid pension contributions using enforcement actions similar to those for tax defaulters. Measures could include freezing bank accounts, seizing assets, and deactivating tax PINs of persistent defaulters.

The RBA has called for stronger penalties and sanctions, including holding CEOs and accounting officers personally liable for failing to remit deductions on time.

Challenges in Public Institutions

Public sector entities such as county governments and state agencies have been among the worst offenders, with delayed Treasury disbursements and budget constraints cited as contributing factors to the non-remittance despite salary deductions.

Kenyan law mandates employers to forward both employee and employer pension contributions promptly. Failure to comply attracts penalties and recovery actions by the RBA and KRA.