Association of Retirement Benefits Schemes v Attorney General & 3 others
The bottom line
#Pension funds for public entities are private trusts, not subject to public procurement laws.
What this practically means
#The Supreme Court ruled that pension funds set up by public entities like government ministries are private trusts, not public bodies. This means they do not have to follow the Public Procurement and Asset Disposal Act when buying goods or services. The money in these funds comes from employee and employer contributions, not public taxes, so it is private property. The court said the law that forced them to use public procurement was unconstitutional.
Executive summary
#Questions the Court framed
#The issues the Court set itself to decide, in its own words.
- 1.Whether pension funds or pension schemes of public bodies are 'public entities' to which the provisions of the Public Procurement and Asset Disposal Act apply.
- 2.What reliefs should issue?
Key legal issues
#Whether pension funds or pension schemes of public bodies are 'public entities' under Article 227(1) of the Constitution and Section 2(o) of the PPADA.
Pension funds of public bodies are not public entities under Article 227(1) because they are private trusts funded by private contributions, not public money, and are not subject to State operational control. Section 2(o) is therefore unconstitutional to the extent it subjects them to the PPADA.
The Court analysed the nature of a pension fund established under the Retirement Benefits Act, finding it to be an irrevocable trust where contributions from employees and employers become private property held for the exclusive benefit of members. The Court distinguished between mere regulation by the State (which applies to many private entities) and the 'deep and pervasive' State control characteristic of a public entity. It held that the public entity contemplated in Article 227 must use 'public money' for procurement, as defined in the Public Finance Management Act, whereas pension fund contributions are private savings. The Court also noted that the PPADA's own list of public entities (excluding Section 2(o)) all use public money appropriated through the national budget. The Court concluded that the inclusion of pension funds in Section 2(o) was a statutory expansion beyond the constitutional concept of a 'public entity' under Article 227.
Whether Section 2(o) of the PPADA violates the right to equality and freedom from discrimination under Article 27 of the Constitution.
The Court did not reach this issue because it found Section 2(o) unconstitutional on the primary ground of inconsistency with Article 227(1). The Court noted that the certified question was about the definition of 'public entity', not constitutional rights violations.
The Court emphasized that its jurisdiction under Article 163(4)(b) was limited to the certified question framed by the Court of Appeal: whether pension funds of public bodies are 'public entities' under the PPADA. The Court stated that the arguments about violations of Articles 27 and 40 were not the central issue, as the certification focused on the definitional question. Having resolved that question in favour of the appellant by finding Section 2(o) inconsistent with Article 227(1), the Court did not proceed to analyse the discrimination or property rights claims separately.
Legal principles established
#- A pension fund sponsored by a public entity is a private trust, not a public entity, because its funds are private contributions, not public money.
- An entity performing public-interest functions or being regulated by the State is not automatically a public entity; its legal personality, autonomy, and funding source matter.
- Section 2(o) of the Public Procurement and Asset Disposal Act is unconstitutional for subjecting pension funds of public entities to public procurement systems.
- Article 227(1) of the Constitution applies only to entities using public money for procurement, not to private trusts like pension funds.
Court orders
#- 1.The appeal dated 9th April, 2024 and filed on 12th May, 2024 is hereby allowed.
- 2.The judgment of the Court of Appeal dated 28th April 2022 in Civil Appeal No.283 of 2017 is hereby set aside.
- 3.It is hereby declared that Section 2(o) of the PPADA is inconsistent with Article 227(1) of the Constitution and therefore void to the extent that it subjects pension funds for a public entity to the application of public procurement systems.
- 4.Each party will bear their own costs of the appeal before this Court.
- 5.We hereby direct that the sum of Kshs. 6,000/- deposited as security for costs upon lodging of this appeal be refunded to the depositor.
The bench
#Judges wrote separately. A dissent does not bind; a concurrence may narrow the ratio.
Wrote the judgment
Wrote the judgment
The dissenting judge held that pension funds for public bodies are public entities subject to the PPADA under Article 227 of the Constitution, and that Section 2(o) is constitutional. She would have dismissed the appeal and upheld the decisions of the High Court and Court of Appeal.
Having established that pension funds for public bodies meet these requirements, I find the position taken by both the High Court and the Court of Appeal to be correct, in that those particular pension funds constitute public entities subject to the Public Procurement and Asset Disposal Act (PPADA) under Article 227 of the Constitution.p. 19
- On appeal from
- Court of Appeal at Nairobi
- Civil Appeal No. 283 of 2017
- Jurisdiction invoked
- Article 163(4)(b) of the Constitution (certification of matter of general public importance)
Relief refused
#Perpetual injunction to restrain the respondents from applying Section 2(o) of the PPADA
The declaration of unconstitutionality rendered the injunction unnecessary as the provision is void to the extent stated.
Costs
Each party will bear their own costs of the appeal before this Court.
Quotable passages
#Verbatim from the judgment, each located to the page it appears on in the official PDF — so these can be cited and checked directly.
Based on what we have stated so far, we entertain no doubt that a pension fund sponsored by a public entity was not contemplated in the enactment of Article 227 of the Constitution to be an entity that was intended to undertake public procurement and thereby to be bound by the provisions of the PPADA.
The mere fact that an entity performs functions of public interest or of a public nature does not, without more, clothe it with the character of a public entity. The legal personality, autonomy in decision-making, and source of funding are critical indicators.
It is hereby declared that Section 2(o) of the PPADA is inconsistent with Article 227(1) of the Constitution and therefore void to the extent that it subjects pension funds for a public entity to the application of public procurement systems.
Each party will bear their own costs of the appeal before this Court.
We hereby direct that the sum of Kshs. 6,000/- deposited as security for costs upon lodging of this appeal be refunded to the depositor.
Issues in the judgment
#The Retirement Benefits Authority changed its position between the lower courts and the Supreme Court, from supporting the appellant to opposing the appeal, which the majority judgment describes as 'approbating and reprobating' and 'unconscionable'.
Key timeline
#Practical implications
#Redefine 'public entity' in procurement cases
When advising clients on procurement compliance, distinguish between entities using public money (e.g., ministries) and private trusts like pension funds. The Supreme Court's focus on funding source and operational control means you can argue that regulated private entities are not 'public' under Article 227(1). Use this precedent to challenge any future statutory expansions of procurement laws.
Pension fund procurement now deregulated
If you provide goods or services to pension funds of public entities (e.g., NSSF or county government pension schemes), you no longer need to navigate complex public procurement tenders. These funds can now negotiate contracts privately, potentially speeding up deals and reducing costs. However, ensure contracts still comply with the Retirement Benefits Act and trust law.
Your pension savings are protected from state control
As a member of a public entity's pension fund (e.g., a teacher or civil servant), this ruling ensures your contributions remain private property, not subject to government procurement rules. This means the fund can invest or spend more flexibly to maximize returns for you, without bureaucratic delays. You can expect potentially better management of your retirement savings.
Frequently asked questions
#Does this ruling mean pension funds in Kenya no longer follow any procurement rules?+
No. Pension funds of public entities are now exempt from the Public Procurement and Asset Disposal Act, but they must still follow the Retirement Benefits Act and their trust deeds. They can choose their own procurement processes, but must act in the best interest of members.
What is the difference between a public entity and a private trust in Kenya after this case?+
A public entity uses public money (taxes) and is under deep state control. A private trust, like a pension fund, uses private contributions from employees and employers, and operates autonomously. The Supreme Court said regulation alone does not make a trust a public entity.
Can the Kenyan government still regulate pension funds of public entities?+
Yes. The ruling only removes pension funds from public procurement laws. They remain regulated by the Retirement Benefits Authority under the Retirement Benefits Act. The government can still oversee their operations, but cannot force them to use public procurement systems.
How does this Supreme Court ruling affect other laws in Kenya?+
The ruling specifically declares Section 2(o) of the Public Procurement and Asset Disposal Act void for pension funds. It does not affect other laws. However, it sets a precedent that any law defining a private trust as a public entity based on regulation alone may be unconstitutional.
Later judgments citing this (5)
#Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.
- Lakeview Panorama Ltd v Kenya Electricity Transmission Company Limited (KETRACO) (Environment and Land Miscellaneous Case E002 of 2026) (Environment and Land) [2026] KEELC 2680 (KLR)[2026] KEELC 2680 (KLR)7 May 2026applied
- Dembena International Limited v National Land Commission; National Bank of Kenya (Garnishee) (Enviromental and Land Originating Summons E005 of 2023) [2025] KEELC 4396 (KLR)[2025] KEELC 4396 (KLR)12 Jun 2025
- Republic v National Land Commission; Mohammed (Suing on Behalf of Bilal Primary School Narok) (Exparte Applicant) (Environment & Land Case 250 of 2018) [2024] KEELC 6711 (KLR)[2024] KEELC 6711 (KLR)14 Oct 2024
- Gituthi & 2 others (All Petitioners suing on their own behalf and on behalf of other 57 Petitioners/Decree -Holders) v National Land Commission & another; National Bank of Kenya Limited & another (Garnishee) (Environment & Land Petition 5 of 2018) [2024] KEELC 5856 (KLR)[2024] KEELC 5856 (KLR)26 Aug 2024
- Cheboi & another v Board of Management Kamoi Secondary School (Employment and Labour Relations Cause 27 & 28 of 2018 (Consolidated)) [2023] KEELRC 893 (KLR)[2023] KEELRC 893 (KLR)14 Apr 2023applied
Cite this brief
#Cite this brief
Caselaw, "Association of Retirement Benefits Schemes v Attorney General & 3 others", Case Analysis (2026). Petition E017 of 2024. Source: https://new.kenyalaw.orghttps://new.kenyalaw.org/akn/ke/judgment/kesc/2026/36/eng@2026-05-15
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.