Senate Committee Session Exposes Pension Crisis

The Senate Committee on Labour and Social Welfare, chaired by West Pokot Senator Julius Murgor, on Wednesday held a heated session that revealed the deepening crisis of unpaid pensions and terminal benefits across several sectors.

The meeting heard emotional testimonies from petitioners, with senators calling for “innovative” solutions to long-standing disputes.

National Treasury Cabinet Secretary John Mbadi told the committee that more than 12,000 councillors served before the 2010 Constitution, but only 328 qualify for a one-off honorarium promised under a 1994 presidential circular. He explained that most of them served part-time without pension benefits.

“Circular 13/94 only recognizes councillors with 20 years of continuous service as eligible,” he said.

Mombasa Senator Miraj Abdullahi questioned whether Treasury had conducted a forensic inquiry to confirm how many of the 328 councillors were still alive, as advised by the Attorney General. Mbadi insisted it was the responsibility of individual councillors to lodge their claims with the Pensions Department if they believed they qualified.

Murang’a Senator Joe Nyutu and Nyamira Senator Okongo Mogeni, SC, voiced sympathy, urging a more compassionate approach. Sen. Nyutu suggested seeking presidential intervention similar to that given to national sports heroes.

Mbadi, however, said only a legal framework could allow such payments. He also condemned what he described as a “criminal” practice—first by defunct local authorities and now by counties—of deducting pension contributions from employees’ salaries but failing to remit them to the relevant schemes. He reported that by October 2024, the unremitted deductions had reached Sh103.3 billion.

The Kenya Railways Staff Retirement Benefit Scheme (KRSRBs) also came under scrutiny. Over 8,000 retirees are demanding arrears estimated at Sh1.6 billion, though management puts the figure at Sh574 million. Despite holding assets worth Sh38.46 billion, nearly 90% of these are tied up in property, leaving the scheme cash-strapped.

Kajiado Senator Seki Lenku called on the Retirement Benefits Authority (RBA) to reconcile the different figures between management and petitioners. He also urged RBA to conduct a forensic audit of the scheme and present the report within two months.

The plight of former Kenya Cooperative Creameries (KCC) workers was also highlighted. They have waited over 20 years for their benefits since the company went into receivership in 1999. Their lawyer, Simoni Namada, pressed their case before the committee. Mbadi, however, argued that a Court of Appeal ruling cleared the government of any legal obligation to pay them.

In a separate resolution, the committee fined Co-operatives and MSMEs Development CS Wycliffe Oparanya Sh500,000 for failing to honour summons to provide information. Senators directed that he be re-summoned in September.

Citing Article 125 of the Constitution and Sections 18 and 19 of the Parliamentary Powers and Privileges Act, 2017, the committee stressed that parliamentary committees have the same authority as the High Court to compel attendance.