NAIROBI, Kenya – Retired Kenya Railways employees could soon receive long-delayed pension payments after the government initiated plans to unlock funds tied up in the scheme’s land holdings.
National Treasury Cabinet Secretary John Mbadi told Parliament’s Labour and Social Welfare Committee on Wednesday, August 20, that the Kenya Railways Staff Retirement Benefits Scheme (KRSRBS) has struggled because it was established without cash contributions from members or sponsors, relying solely on real estate investments.
“From the onset, the Kenya Railways staff benefits scheme has operated on a non-contributory basis. No monetary contributions are made to the scheme by members or sponsors,” Mbadi said.
He noted that the structure has left the scheme dependent on property sales to generate cash for pension payouts, causing long delays in disbursements.
To ease the crisis, the Treasury is backing negotiations for the sale of 141 acres of land in Makongeni, Nairobi, which the Affordable Housing Board has formally expressed interest in acquiring.
“The intended use of this land is for the development of residential housing units. This transaction presents a strategic opportunity for the Kenya Railways staff retirement benefits scheme to unlock significant value from one of its largest and most strategically related land assets,” Mbadi told MPs.
The CS assured that proceeds from the deal would inject much-needed liquidity into the scheme, allowing consistent and timely settlement of dues owed to pensioners.
“Once the sale is finalised, substantial funds will be generated, improving the scheme’s liquidity position and enabling timely and consistent payments of benefits to retired members,” he added.
KRSRBS, which manages retirement benefits for thousands of former Kenya Railways employees, has for years faced criticism over its inability to pay dues promptly, with many pensioners left struggling to make ends meet.
The Makongeni transaction, if successful, is expected to not only boost the scheme’s finances but also contribute to the government’s Affordable Housing Programme.
