EDITORIAL: Defuse ticking public pension time bomb

For nearly 10 years, the government has talked of reforming the public pension scheme to ensure that retired civil servants live comfortable lives in old age.

But that has yet to be backed by any concrete action, leaving the pension time bomb to keep ticking away.

No other entity understands the dangers of the ad hoc pension system currently in place better than the state itself. Yet senior officials in senior public finance management positions appear unperturbed by the looming crisis.

The attitude apparently being that as long as it is working, the current arrangement where the taxpayer forks out the cash as need arises, needs no fixing. Not anymore. The latest official figures show that the public pension bill is becoming unsustainable.

The expense is set to hit Sh71.8 billion in the next fiscal year, higher than the Health ministry’s entire budget and is expected to hit the Sh104.4 billion mark in 2019/20.

Without doubt, the figures imply that the time of reckoning is finally here. That’s why we take this opportunity to remind the government that failure to act is no longer an option.

It must immediately push through a number of reforms, among them, kick-starting the contributory pension scheme for its workers.

For starters, pension is payable to civil servants  who have served at least 10 years and subordinate forest guards, prison and police officers who have worked for at least 12 years.

Those who have been compelled to retire early are also entitled to receive the benefits. More than 10,000 individuals join the pension pool each year upon retirement.

The government even tried to create some room for the rollout of the contributory scheme by raising the retirement age from 55 to 60.

But nothing concrete was done and the reality has come to bear. In the meantime, public pension has grown to appoint where it currently competes with development expenses for the taxpayer funds.

To be fair to the government, part of the reason it has been slow in creating a contributory scheme is strong opposition to the move from trade unions.

But that is where sensitisation needs to come in. Employees should be made to understand that pension is more about saving than a deduction.

Ultimately, it will not matter how long the State skirts around this burning issue. It will eventually have to introduce a contributory scheme for its workers. The earlier it does this the better.