StanChart to pay Sh7bn in pension row after court loss

Standard Chartered Bank Kenya is preparing to pay Sh7 billion to more than 600 former employees after the Supreme Court dismissed its 16-year pension dispute, ruling in favour of the retirees who argued their benefits had been undervalued.

The 629 ex-staff successfully challenged the bank’s pension scheme conversion from a defined benefit to a defined contribution plan, saying the change short-changed their savings.

With the top court affirming the Retirement Benefits Appeal Tribunal’s decision, the bank said it is now ready to comply, noting it has sufficient capital to cover the multi-billion claim.

The expected payout amounts to 86.6 percent of the lender’s Sh8.08 billion net profit for the half year to June 2025, and equals half of the record Sh13.9 billion dividend it declared last year.

“We have initiated a structured process to execute the judgment in accordance with the legal requirements and are committed to maintaining open communication with affected pensioners,” the bank said in a statement yesterday. “We would like to assure our clients and stakeholders that we are adequately capitalised to meet the anticipated obligations.”

StanChart closed the first six months of the year with Sh56.2 billion in core capital, signalling financial resilience even as it prepares to settle the obligation. Despite this, the lender has launched a fresh challenge at the High Court in Nairobi, with a hearing set for today, in a bid to stall or delay the enforcement.

The Supreme Court last week struck out the bank’s plea for a stay of execution, ruling that it had no jurisdiction over the case as it did not involve constitutional interpretation.

"The mere allegation of constitutional violations cannot bring the appeal within the ambit of this court's jurisdiction under Article 163(4)(a). Based on the foregoing, it is clear to us that this court lacks jurisdiction to hear and determine the intended appeal and the application for stay attendant thereto," the judges said.

StanChart, together with trustees of its Pension Fund and Staff Benefits Scheme, had asked the apex court to halt enforcement of the tribunal’s decision that favoured former workers, some of whom retired in the 1990s.