Civil Servants' Pension Payout Hits Ksh 13.16 Billion in Two Months

Kevin Namunwa | Sep 24, 2020

The National Treasury has already spent Ksh 13.16 billion on pension payouts to retired civil servants in the first two months of the current financial year. The expenditure has more than doubled compared to the figure in the first two months of the previous financial year.

Exchequer data released by National Treasury Cabinet Secretary Ukur Yatani shows that taxpayers spent Ksh 13.16 billion on pension and gratuities pay in July and August, a 108.36% jump compared with the same period last year.

In the previous financial year, payment of the retirement benefits fell short of the targeted Ksh 104.49 billion by Ksh 17.50 billion.

Treasury CS Ukur Yatani said the deficit was due to slower than targeted processing of the dues.

The CS has, however, pledged to clear the backlog by end of the year ahead of roll out of a contributory pension scheme for civil servants from January which is expected to ease pressure on taxpayers.

During this financial year ending June 2021, the Treasury has budgeted Ksh 119.19 billion towards retirees’ benefits, cash which is nearly three-and-a half-fold more than Ksh 27.71 billion seven years earlier.

Pension pressure has continued to pile for taxpayers despite a knee-jerk decision in 2009 to raise the retirement age from 55 to 60. The Treasury’s failure to push through necessary reforms, including a contributory scheme, has partly caused the pension pressure piling on taxpayers.

"The National Treasury is re-engineering and upgrading the pensions system in order to clear all pension payment backlog by the end of the calendar year,” Mr Yatani said on June 11.

“This will pave way for a modernised pension management system that will guarantee smooth transition of retirees from a monthly salary cheque to a monthly pension payment."

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