Standard Chartered Bank Kenya has obtained a court order blocking Sh7.09 billion worth of pension benefits to its former employees.
The Retirement Benefits Appeals Tribunal (RBAT) had, on June 18, directed the lender and the trustees of Standard Chartered Kenya Pension Fund to pay the amount to the 629 retirees after years of court battles.
The tribunal had also assessed the costs of the suit and directed the scheme to pay the retirees Sh709 million, bringing the total amount to Sh7.79 billion.
However, the scheme moved to the High Court and stopped the execution of the decision, pending the determination of its case.
“Pending the inter partes hearing and determination of the Petitioners/Applicants' Notice of Motion Application dated 24/06/2025, a conservatory order be and is hereby issued staying the execution, recovery, and payment of costs pursuant to the Decree dated 18/06/2025 and also any further proceedings in RBAT Appeal No. 8 of 2021, Abdalla Osman & 628 Others versus Retirement Benefits Authority & 5 Others," Justice Bahati Mwamuye said in a ruling on June 24.
The court order further delays the payment of dues of the former employees, who have been fighting in court for years.
The lender had earlier indicated that it would be moving to the Supreme Court after failing to overturn a ruling against it at the Court of Appeal.
Justice Mwamuye directed the parties to file their responses ahead of the mention on September 9, 2025, for directions on the hearing of the case.
The pensioners sued their former employer and the scheme accusing them of reducing their lump sum payment.
The retirees submitted that the conversion of the pension plan from a defined benefits scheme to a defined contributory scheme on January 1, 1999, resulted in a reduction of future accrual of benefits.
In a defined benefits scheme, the benefits are based on a formula and accrue independently of the contributions payable and investment returns.
A contributory scheme requires contributions to be made by active members.
The retirees argued that the trustees failed or neglected to distribute the surplus to the members who transferred to the new Contributory Section of the fund.
The tribunal had found that the principal amount due to the pensioners for underpayment was Sh826.5 million, plus interest of 14 percent from March 2009 to date totalling Sh2.425 billion.
Further, the tribunal had ordered a refund of the surplus to the pension fund scheme of Sh1.125 billion plus interest of 14 percent from March 2009 to date.
On March 13, the tribunal gave the company one week to finalise and file a re-calculation report in compliance with the judgment obtained by the retired workers.
The tribunal had resorted to using an actuarial report presented by Zamara Actuaries, who were appointed by the trustees of the scheme, and tabled before it on March 26, 2025.
The tribunal then awarded the retirees Sh7.09 billion based on the report by Zamara.
The pensioners sued their former employer and the scheme accusing them of reducing their lump sum payment.
They had sought payment of Sh9 billion as the balance of the lump sum pension benefits plus interest and a refund of Sh1.1 billion, which was paid to the bank as surplus.
In a letter on June 18, Standard Chartered lawyers indicated that it would not approve the decree for various reasons including the issue of costs.
The trustees had stated that no specific sum was claimed or awarded but the appeal before the tribunal was in respect to the factors to be applied in computing the pension dues as opposed to a claim for a specific sum.
"The only specific sum pleaded, prayed for, and awarded is the Kshs1.125 billion refunded to the scheme which in any event is not payable to the Appellants and in respect of which Party and Party Costs cannot be claimed or pegged upon as this payment does not go to the Appellants," stated the letter.
The Standard Chartered pension fund was established through a Trust Deed on June 3, 1975, for the purposes of providing pensions on retirement and other benefits to the employees of the bank.
The trust deed established a defined benefit scheme for existing and future employees of the bank, to be controlled and managed by the trustees on an irrevocable trust.
From January 1999 the bank, with the sanction of the trustees of the scheme, established a new defined contribution scheme as a separate section of the first scheme, under the existing trust arrangement.
The 629 deferred pensioners opted to receive a lump sum, under voluntary early retirement.
