The Retirement Benefits Authority (RBA) has declared war on pension defaulters, proposing draconian new measures that could see government agencies frozen out of Treasury disbursements if they fail to remit employee deductions.

The era of treating pension remittances as "optional" operational costs is over. In a bold policy shift for the 2026/2027 fiscal cycle, the RBA is seeking to weaponize the National Treasury against defaulting sponsors. The regulator's proposal is simple but devastating: introduce a "statutory clearance mechanism." Effectively, if a Ministry, State Department, or County Government cannot prove it has remitted its employees' pension deductions, the Treasury will turn off the tap for their other funding.

This escalation is not without cause. The pension sector is sitting on a ticking time bomb of unremitted contributions, which ballooned to a staggering Sh72 billion (approx. USD 553m) by June 2025. This is not just an accounting error; it is the theft of workers' futures. The "So What" is the looming destitution of thousands of retirees who, upon exiting the workforce, find their savings accounts empty despite years of deductions.

The "No Pay, No Play" Doctrine

The RBA's policy document is explicit.It proposes to "reinstate the statutory clearance mechanism whereby sponsors may only access disbursements or statutory funds upon proof of full compliance." This moves the enforcement upstream, cutting off the defaulter's lifeline before they can divert funds elsewhere. Furthermore, the RBA is seeking powers to issue garnishee orders, allowing them to seize unremitted contributions directly from the bank accounts of defaulting sponsors—a move that places the Kenya Revenue Authority (KRA) at the heart of the collection process.

A Crisis of Compliance

The County Pension Fund (CPF) alone is owed billions, with County Governments being the worst offenders. The culture of impunity has been entrenched by the fact that previous fines were considered a "cost of doing business." The RBA now seeks to hike these penalties to punitive levels that make default more expensive than compliance.

• Total Unremitted Assets: Sh72 billion (as of June 2025).
• Key Culprits: Public Universities, County Governments, State Corporations.
• Proposed Solution: Direct Treasury intercepts and KRA enforcement.

The Human Cost

Behind the billions are individual tragedies. Retirees are dying in poverty while waiting for their dues. The RBA's move to involve the KRA signals a shift in perception: unremitted pension is no longer a civil debt; it is treated with the severity of tax evasion. If passed, these amendments will force Accounting Officers to prioritize pension payments over all other operational costs—including their own perks.

As the public participation forums kick off this week, the message to employers is chillingly clear: Remit the money, or watch your own funding dry up. The free ride on workers' savings has hit a dead end.