Govt Wants Young Kenyans Allowed to Withdraw Pension Cash for Urgent Bills

Hello and welcome to the Money News Roundup Newsletter, where we cover reforms that will see employees access part of their pensions early. We also cover a court ruling regarding the removal of employees from work WhatsApp groups.

Govt Proposes Two-Pot Pension System Allowing Early Access to Part of Savings 

Kenyans may soon be able to access a portion of their pension savings early for education, housing, and medical expenses under new proposals from the Retirement Benefits Authority (RBA). 

According to the Business Daily, the “two-pot” pension reform will channel part of contributions into a separate account that members can tap during financial hardships, while preserving the bulk for retirement.

Currently, pension benefits can only be accessed before age 50 if unemployed or changing jobs; financial hardship is not recognised. Under the new plan, only contributions made after approval will be eligible for early withdrawal.

For example, a worker contributing Ksh15,000 monthly could have Ksh3,000 placed in the subaccount, with the rest reserved for retirement. Trustees, with RBA approval, will decide the portion allocated to the subaccount.

The reform draws lessons from South Africa, where one-third of contributions go into a savings component accessible for emergencies, while two-thirds remain for retirement. Withdrawals are limited and taxed at the individual’s marginal rate.

The RBA hopes this flexibility will boost pension uptake, particularly among informal sector workers, while still ring-fencing most savings to secure long-term retirement funds. 

Critics warn that early access could reduce retirement wealth, but proponents argue it helps members in acute financial distress, such as paying for overseas medical care or avoiding property auctions.

State House Kenya Exceeds Annual Recurrent Budget by Ksh2.7 Billion in Seven Months

State House Kenya exceeded its full-year recurrent budget by Ksh2.7 billion within seven months, heightening scrutiny over government spending controls.

Treasury data shows State House spent Ksh10.4 billion by January 2026 against an annual allocation of Ksh7.7 billion, surpassing its ceiling by 35% with five months remaining.

As reported by the Business Daily, January alone accounted for Ksh1.3 billion, or about Ksh42.6 million daily.

The Office of the Deputy President of Kenya also breached its limit by Ksh361.6 million. The overruns come as the National Treasury of Kenya prepares a Ksh262.9 billion supplementary budget, raising total spending to Ksh4.532 trillion.

The fiscal deficit is projected to widen to Ksh1.14 trillion, or 6% of GDP, underscoring pressure to rein in recurrent expenditure.

Sasini Shares Jump 59% After Ksh7.9 Billion Asset Sale Deal

Sasini shares have surged by 59% in six sessions, closing at Ksh32.00 on February 13 from Ksh20.10 on February 5, after its FY2025 report revealed an agreed Ksh7.9 billion sale of the Gulmarg Division in Mweiga Estates, Kiambu County.

As reported by the Kenyan Wall Street, the asset had a book value of Ksh3.78 billion as at September 30, 2025, implying a gross uplift of about Ksh4.1 billion—more than double its carrying value. 

The sale value exceeds Sasini’s market capitalisation of roughly Ksh7.06 billion.

Trading volumes rose sharply, with sustained higher closes signalling strong demand. Investors are speculating about a special dividend, given the stable 228 million share count. 

However, proceeds are yet to be realised, and taxes and transaction costs will reduce net distributable cash.

Removing Employees from Work WhatsApp Groups Can Be Unlawful - Court

The Employment and Labour Relations Court has ruled that removing an employee from work-related WhatsApp groups can constitute unlawful discrimination and constructive dismissal. 

The case involved Fidelis Wambui, a customer service officer at Hallmark Marketing Limited, who was placed on pregnancy-related sick leave in March 2021.

While on leave, she was removed from 21 WhatsApp groups and had her email access blocked, then placed on indefinite unpaid leave.

The court found these actions breached her employment contract, violated fair labour practices, and were directly linked to her pregnancy. It awarded Wambui Ksh4.4 million, covering unpaid leave, house allowance, service pay, and compensation for constitutional violations under Articles 27, 28, 29, and 41. 

The ruling establishes that employers cannot marginalise staff via digital platforms, particularly during medically justified leave, reinforcing protections against discrimination and ensuring adherence to employment law in workplace communications. Read more

Flights Disrupted at JKIA After Aviation Workers’ Strike

Kenyan aviation authorities on Monday activated contingency measures to restore operations at Jomo Kenyatta International Airport after a strike disrupted flights.

The walkout by the Kenya Aviation Workers Union over a long-pending collective bargaining agreement caused delays, stranding passengers and affecting airlines and cargo operations. 

As reported by Capital Business, the Kenya Airports Authority urged travellers to contact airlines for updates.

Kenya Airways said air traffic control delays were impacting departures and arrivals, advising passengers to check flight status online. Kenya Civil Aviation Authority Director General Emile Arao said recovery is underway, with backlogs being cleared in a structured manner.

Authorities expect normal schedules to resume soon, urging passengers to confirm details before travel.

Diaspora Remittances Dip to Ksh53.1 Billion in January After Record 2025 Inflows

Kenya’s diaspora remittances eased at the start of 2026, falling 3.8% year on year to Ksh53.1 billion ($411.3 million) in January, according to the Central Bank of Kenya. 

The decline followed strong year-end inflows and weaker transfers from Gulf countries.

Despite the dip, 12-month inflows rose 1.2% to Ksh648.0 billion, while full-year 2025 remittances hit a record Ksh649.7 billion. 

As detailed by the Kenyan Wall Street, North America remained the top source, contributing 58%, with Europe second. The UK overtook Saudi Arabia as Kenya’s second-largest corridor.

Remittances covered nearly 40% of Kenya’s Ksh1.63 trillion trade deficit in 2025, underscoring their macroeconomic importance. CBK expects moderate growth in 2026, supporting exchange rate stability and foreign reserves.

NSSF to Cap Govt Bond Holdings at 60% and Boost Investments in Equities and Offshore Assets

The National Social Security Fund plans to cap its exposure to government securities at 60% of total assets, down from 64%, potentially redirecting billions of Ksh into equities, regional markets, and offshore investments. 

As of June 2025, NSSF held Ksh355.4 billion in Treasury bonds and Ksh34.3 billion in Eurobonds, with total bond holdings at Ksh391.25 billion or 70% of assets.

NSSF Managing Trustee David Koross said the move reduces concentration risk while enabling higher returns from other asset classes. Equities holdings rose to Ksh85.13 billion, or 14.8% of total assets, boosted by a 51.8% stock market gain in 2025.

With projected member contributions of about Ksh100 billion this year and rising contribution caps, now Ksh6,480 per month for higher earners, the fund aims to diversify into alternative assets such as REITs, private equity, and unit trusts, while maintaining strong returns and risk management. 

Total net assets reached Ksh572.77 billion in June 2025. Read more

Other Updates

• The Central Bank of Kenya has made the first coupon payment to investors since reopening the 19-year Infrastructure Bond in August 2025. The payment was made on February 16. The bond, which was first launched in 2022, carries an interest rate of 12.9% with the next scheduled coupon due on August 17, 2026. Investors who participated in the long-term bond will continue to receive semi-annual interest payments over the life of the instrument, with full redemption set for 2041.