Every month, public sector employees in Kenya—teachers, county staff, and parastatal workers—see pension deductions on their payslips, meant to guarantee retirement security. Instead, that promise has become an illusion. Public records show that at least Sh56 billion in pension contributions has been deducted from salaries but never remitted to the Retirement Benefits Authority (RBA). Counties, public universities, sugar firms, and water agencies are among the main culprits, accused of diverting pension money to cover budget deficits and operational expenses.
“These funds are being deducted directly from salaries but again when it comes to paying them, you find that there is no money. That is theft,” said Kimani Kuria, chair of the National Assembly Finance and Planning Committee, during a grilling of RBA officials. Treasury disburses allocations to state agencies, which pay salaries but often fail to forward pension deductions. With little enforcement power, the RBA admits some retirees have waited decades—48 claimants since the late 1990s, some of whom died without receiving their dues.
The structure now resembles a Ponzi scheme: current contributions partly fund current retirees, but when remittances are withheld, the system falters. Analysts warn this is unsustainable, especially as debt service consumes nearly two-thirds of government revenue, leaving little for social spending. Oversight bodies are pushing back. The Office of the Ombudsman has ordered the Pensions Department to clear 144 pending claims within 60 days or risk having its director declared unfit for public office, a move that could set a precedent for personal accountability.
Behind the figures are stories of despair. Mugambi Ngeera has spent nearly three decades pursuing his late wife’s gratuity. “Every time I go to Huduma Centre, they tell me it is processed, but there is no money,” he says, weary from waiting. For younger workers, the unfolding crisis is a sobering warning that Kenya’s pension safety net is far less secure than it appears.
Insurers go digital breaking free from legacy barriers
Africa’s insurance industry is betting big on Artificial Intelligence (AI) and digital connectivity to cut costs, boost efficiency, and expand coverage to millions who remain uninsured. At the InsurTech Forum Nairobi (ITFN) 2025, insurance executives and regulators warned that outdated legacy systems are stifling innovation by locking customer data in silos. Currently, only about one percent of insurance operations in Africa use AI, but Deloitte East Africa Consulting Leader Urvi Patel projected that adoption will surge to 80 percent within the next five years.
“The biggest challenge for insurers today is reliance on legacy systems that are expensive, inefficient and cumbersome,” said Moses G. Kuria, Group Chief Financial Officer at M-TIBA. “The industry will greatly transform by leveraging connected end-to-end digital systems that improve efficiency, simplify products, and allow for more personalised, customer-friendly services.” Kuria highlighted that health insurance is poised for dramatic change as interconnected systems, predictive analytics, and member-focused solutions shift the industry from reactive claims handling to proactive health management.
The forum, held under the theme “From Legacy to AI: Actionable Next Steps,” brought together more than 150 executives, regulators, board members, and innovators. It was organised in partnership with the Association of Kenya Insurers (AKI), the Insurance Institute of Kenya (IIK), and Caava Group, with support from M-TIBA, Deloitte, NCBA Bancassurance, Old Mutual, Redian Software, and NCBA-IG.
Ayisi Makatiani, CEO of Caava Group and convener of ITFN, noted that the dialogue on AI had matured from debating its necessity to focusing on practical implementation. “The dialogue around AI in insurance has moved from asking ‘why’ to focusing squarely on ‘how,’” he said. “ITFN 2025 is about equipping leaders with the tools, insights, and partnerships to move from theory to scaled, practical transformation.”
The forum featured keynote sessions, panel debates, and the Ultimate AI Innovation Challenge, where startups pitched new solutions for underwriting, fraud detection, claims processing, and customer engagement.
