Retired Kenya Railways employees may soon start receiving their long-overdue pension payments after the government unveiled a plan to unlock funds from land assets owned by their retirement scheme.
National Treasury Cabinet Secretary John Mbadi told the Labor and Social Welfare Committee on Wednesday, August 20, that the Kenya Railways Staff Retirement Benefits Scheme (KRSRBS) has struggled because it was set up without contributions from either members or sponsors.
“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 explained.
He noted that the scheme’s reliance on real estate investments had slowed down pension disbursements, but the government is now working to fix the situation by supporting land transactions.
At the heart of the plan is 141 acres of land in Makongeni, which the Affordable Housing Board has already expressed interest in acquiring. Mbadi described the deal as a much-needed lifeline for the struggling fund.
“The affordable housing board has expressed formal interest in acquiring approximately 141 acres of land in the Makongeni area, which is currently owned by the scheme,” he said.
He added that the land would not only provide space for new housing projects but also inject much-needed liquidity into the scheme.
“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 said.
The CS assured that once completed, the transaction would ease financial pressure on the scheme and guarantee timely payments to retirees.
“Once the sale is finalized, substantial funds will be generated, improving the scheme’s liquidity position and enabling timely and consistent payments of benefits to retired members,” he affirmed.
The government hopes the move will finally bring relief to former Kenya Railways workers, many of whom have waited years for their rightful dues.
