Retirement Benefits Authority CEO Nzomo Mutuku. PHOTO | SALATON NJAU
Pension schemes will take over buildings owned by public
universities over un-remitted retirement deductions, pointing to the
dire cash situation at the institutions.
Retirement
Benefits Authority (RBA) chief executive Nzomo Mutuku said
vice-chancellors of the affected universities have agreed to cede
ownership of some of their buildings to clear the arrears estimated at
Sh8.4 billion.
The industry regulator had in May warned
that six public universities, including the University of Nairobi and
Jomo Kenyatta University of Science and Technology (JKUAT) risked losing
prime properties if they failed to clear the arrears.
“We
have met with vice-chancellors of all the affected universities on the
remedial plans, in some cases where they have high liquidity challenges
they (universities) have agreed to transfer non-core assets like
buildings to the particular schemes,” Mr Nzomo said.
Education
Secretary George Magoha had in June ruled out funds from Treasury to
help the institutions clear the debts besides Sh8.1 billion in tax
arrears owed to Kenya Revenue Authority, setting the stage for the tough
measures where the institutions will lose some of their buildings.
Universities must clear the arrears within six years—the maximum
period allowed in law even as they continue to grapple with a cash
crunch caused by a dip in parallel degree admissions which has for years
been one of their biggest revenue streams.
Admission
to public universities of nearly all students who scored C+ and above
has fallen since 2016, reducing the pool of learners available for
parallel programmes in public universities.
The
introduction of funding based on courses offered since 2017 has further
hit the universities’ coffers, in addition to a high wage bill.
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