TelPosta Pension Scheme has dodged a Sh13.4 billion pension liability after the High Court dismissed claims by former members for additional payout, ending a 15-year legal battle that had threatened to plunge the fund into a massive deficit.

The dispute revolved around allegations by past members that their retirement benefits had been under-calculated, leading to a claim initially quantified at Sh7.2 billion and later projected to rise to Sh13.4 billion due to accrued interest and the passage of time.

In its latest rulings, the High Court agreed with the decision of the Retirement Benefits Appeals Tribunal (RBAT) delivered on October 2, 2025, upholding that the scheme had computed and paid benefits in line with its Trust Deed and the Retirement Benefits Act.

“I would agree with the 1st respondent (RBA Tribunal) and the interested parties that the instant application is an appeal disguised as a judicial review. It lacks merit, and it is for dismissal, and I hereby, accordingly, dismiss it. There shall be no order for costs,” said the judge in a July 27, 2026 decision.

The courts' decision effectively shields the scheme from a potential financial shock that, according to actuarial assessments disclosed in its 2025 annual report, would have created a deficit of about Sh9.7 billion in its books.

“We welcome the High Court's judgments, which bring further legal clarity and reinforce confidence in the governance and administration of the TelPosta Pension Scheme,” the board chairman of the scheme, Julius Cheptiony, said.

The case has undergone scrutiny across multiple legal and regulatory forums, including the Retirement Benefits Authority (RBA), the RBA tribunal, the High Court and the Court of Appeal over 15 years.

The dispute was centred on whether the scheme had correctly applied its benefit calculation formula. Trustees maintained throughout the proceedings that all payouts were based on the scheme’s rules, arguing that any deviation would have breached contractual obligations and statutory requirements.

The favourable ruling provides certainty for the scheme, which operates as a closed defined benefit fund and has not received new contributions since December 2007. Such schemes are sensitive to large, unplanned liabilities due to their reliance on existing assets to meet future obligations.

Previous disclosures show that the scheme had already factored in the legal risk in its actuarial evaluations, warning that an adverse outcome would materially affect its financial position.

The scheme was established in 1997 to manage retirement benefits for employees of the former Kenya Posts and Telecommunications Corporation and its successor institutions, including Telkom Kenya and the Postal Corporation of Kenya.

Most of the members are former employees and dependants of people who worked at East African Posts & Telecommunications Corporation (EAPTC) and Kenya Posts & Telecommunications Corporation (KPTC).

EAPTC and KPTC gave birth to Telkom Kenya Limited, Postal Corporation of Kenya and Communications Authority of Kenya, which later set up their own separate pension schemes, leaving Telposta as a closed scheme.

The Telposta scheme pays out an average of Sh11,895 every month to its members. Since becoming a closed scheme, it has paid out over Sh14.5 billion to its over 5,000 members.

The scheme, which currently has about 83 percent of its investment portfolio in properties, is eyeing about Sh10 billion from the sale of four strategic assets to the government as part of the move to cut exposure in properties to the permitted maximum of 30 percent.

The four properties are TelPosta Towers, Gilgil GTI staff quarters and two flats in Makande and Bombolulu in Mombasa.

palushula@ke.nationmedia.com