Pension Trustees in Kenya: 8 Things They Can’t Do With Your Money

Updated 2 November 2026

Pension trustees in Kenya are bound by the Retirement Benefits Act, 1997: they cannot lend scheme money to anyone, cannot mix it with the employer’s or their own funds, cannot invest it to win cheap loans or favours for the sponsor, members or themselves, must report contributions unpaid for more than 30 days to the Retirement Benefits Authority (RBA), and must file audited accounts within three months of the year end or face penalties. Your pension savings are also shielded from most court attachments.

Here are eight things the law says trustees, managers and custodians of a retirement benefits scheme cannot do, with the section number for each. Updated November 2026. Source: Retirement Benefits Act, 1997 (Kenya Law).

Who are pension trustees in Kenya?

Every private occupational or individual scheme must be set up under an irrevocable trust (section 26(1)). Trustees, who may be employer and member nominees or a corporate trustee, run the scheme for members; a registered fund manager invests the money; a custodian holds the assets; and an administrator keeps member records. All must be registered by the RBA, and the RBA must approve each trustee (section 26(3)). If you are unsure whether your scheme is a pension or provident fund, see our pension vs provident fund guide.

8 things pension trustees can’t do with your money

1. Lend it out. Section 38(1)(a): no scheme funds shall be “used to make direct or indirect loans to any person”. That covers loans to the employer, to trustees and to members. The one exception is section 38(1A): a prescribed share of your accrued benefits can be assigned to secure a mortgage or buy a residential house on terms set by regulations.
2. Use it to buy favours. Funds may not be placed with a bank, insurer or other institution “with a view to securing loans, at a preferential rate of interest or for any other consideration” for the sponsor, trustees, members or manager (section 38(1)(c)).
3. Mix it with other money. Section 32(2) requires the scheme fund to be kept separate at all times from any other funds the trustees or manager control.
4. Invest outside the rules. Investments must follow a prudent investment policy and the regulations (sections 37 and 38(1)(b)), and statutory contributions may only go into government securities or public infrastructure bonds.
5. Keep quiet about unpaid contributions. Section 40(d) obliges trustees and managers to report to the RBA as soon as reasonably practicable if any contributions remain due for more than 30 days. Section 40(b) requires them to act in members’ best interests.
6. Skip the audit or accounts. Accounts must be audited by an auditor who is not a member, trustee or sponsor of the scheme (section 34(3)) and sent to the RBA within three months of the year end (section 34(4)). Late filing costs trustees KSh 100,000 plus KSh 1,000 a day (section 34(4C)).
7. Ignore an RBA order. If the RBA chief executive directs a trustee to stop an unsafe or unsound practice, continuing is an offence carrying a fine of up to KSh 500,000, two years in prison, or both (section 39).
8. Serve if disqualified. No one may be a trustee if they were jailed for six months or more, are bankrupt, or helped run a scheme that was deregistered for management failure (section 26(2)).

Your pension is protected from creditors

Section 36 says that where a judgment is made against a scheme member, no execution or attachment may be issued against the member’s or employer’s contributions except under the scheme rules, and the contributions do not form part of the member’s or employer’s assets in bankruptcy. That protection is one reason not to withdraw early; check the limits in our pension withdrawal rules and the tax in is pension withdrawal taxable.

What to do if you suspect a problem

• Ask the administrator for your member statement and compare contributions with your payslips.
• Ask the trustees for the latest audited accounts and investment policy.
• Complain to the scheme in writing; if unresolved, take it to the RBA chief executive. Section 46 lets members appeal decisions of trustees or managers to the CEO, and section 48 provides a further appeal to the Retirement Benefits Appeals Tribunal.
• Project what your pot should be worth with our retirement calculator.

Frequently asked questions

Can pension trustees lend money from the scheme?

No. Section 38(1)(a) of the Retirement Benefits Act bans using scheme funds for direct or indirect loans to any person.

What happens if my employer deducts pension but doesn’t remit it?

Trustees and managers must report contributions unpaid for over 30 days to the RBA (section 40(d)). The Employment Act also makes failing to remit deducted pension contributions an offence.

Can creditors seize my pension savings in Kenya?

Generally no. Section 36 bars execution or attachment of contributions except under the scheme rules and keeps them out of bankruptcy assets.

Can I use my pension to buy a house?

Section 38(1A) allows a prescribed proportion of accrued benefits to be assigned to secure a mortgage or buy a residential house, on terms set by regulations.

Source: Retirement Benefits Act, 1997 (No. 3 of 1997), sections 26, 32, 34, 36 to 40, read 2 November 2026. General information, not financial or legal advice.