The Technical University of Kenya (TUK) now risks being liquidated over its failure to remit more than Sh800 million to the Staff Retirement Benefits Scheme.

The Retirements Benefits Authority said due to low funding of the scheme and persistent breaches and absence of any concrete remedial action by the university, they were forced to petition the High Court to wind up the university scheme.

“I would like to inform the Senate that the liquidator is now legally allowed to collect the contribution arrears from the Technical University of Kenya and pay the outstanding benefits to the scheme’s members,” said Chief Executive Officer Charles Machira.

According to the scheme’s Trust Deed and Rules contributions were initially set at 7.5 per cent for the employee and 15 per cent for the employer between July 1, 2009, and June 30, 2013.

Machira yesterday told a Senate committee that from July 1, 2013, the rates were to increase to 10 per cent for employees and 20 per cent for the employer. However, the university continued to remit contributions at the rate of 7.5 per cent.

He said the latest quarterly investment report submitted by the fund manager for the period ending December 31, 2024, showed the scheme’s investment totaled Sh658.4 million, with an interim administrator of the scheme expected to serve for three months.

“Upon the expiration of the interim administration period, a final report was filed that reported total outstanding contribution of Sh772.9 million, which comprised of all contributions due from July 1, 2010, to February 28, 2016, an amount which included the interest, accrued on the contributions,” said Machira.

The CEO revealed that the pension scheme was wound up after the university failed to remit millions of shillings in statutory deductions after the interim administrator observed that the university was not committed in its obligations.

The Vice Chancellor Benedict Mutua said the university was operating on a negative capital to not only run its operations but also pay its staff their salaries and other statutory deductions, which has led to failure to remit the contributions on time.

Prof Mutua told the Senate that the institution was only receiving Sh63 million as capitation from the National Treasury against a budget of Sh272 million where they are only able to pay net salaries to their staff and they were unable to remit statutory deductions.

“We need Sh272 million to meet our obligation, we are currently spending Sh156million yet the National Treasury only gives us Sh63million as capitation, we are worried for running a government institution that is not remitting statutory deductions on time,” said Prof Mutua.

The Vice Chancellor told the Senate that they have written many letters to both the Ministry of Education and the National Treasury concerning the financial status of the university without a positive response so far and that it was not their wish to fail in meeting their obligation.

The petitioners led by Fred Sawenja told the committee that despite signing a Collective Bargaining Agreements with the University with the pension as a component of the agreement, the university has been deliberately refusing to remit the statutory deductions.

Sawenja said there has never been a deliberate effort to make the pension scheme for the more than 1850 members work since its inception in 2013 with a clear conflicts of interest since this pension scheme was registered.

TUK former Vice Chancellor Prof Francis Aduol insisted that the pensioners’ funds have not been lost, adding that the university has been consistently underfunded for years with the government only giving money for capitation and not salaries or for pensions.

“Let me make it clear that the government does not give universities money for salaries or pensions it only gives capitation with the university left to prioritize what it will implement it should be noted that the government is giving insufficient funds,” said Aduol.

Prof Aduol’s response displeased the Senators who questioned the attitude of the university management especially towards its employees who have dedicated themselves over the years only to appear to be disregarded by their employer which was very unfortunate.

Nominated Senator Miraj Abdillahi pointed out that there has been issues of governance and attitude towards the welfare of the employees of Technical University of Kenya with a clear indicator that the institution did not prioritize the remittance of statutory deductions.

Abdillahi said it was clear that the university management has does not care about the well being of their employee attitude and that someone should be held accountable for the mismanagement of the pension scheme.

Nominated Senator Gloria Orwoba asked the government to take responsibility for under funding the institution stating that it was wrong for it to decide not to remit the pensioner’s funds yet it is their contribution.