Retired civil servants received a three per cent pay rise, adding to the burden of keeping public servants comfortable in old age with the pension bill rising to Sh71.8 billion.
The adjustment was made last month in keeping with the tradition of increasing the monthly pension by three per cent every two years in the race to match the rising cost of living.
At three per cent, the retirees still trail inflation or the cost of living measure—which stood at 8.5 per cent last year and 6.5 per cent in 2015.
The move is equivalent to an increase of Sh1.67 billion.
“We recently gave retirees a three per cent review. We do it every two years,” Director of Pensions at the National Treasury Shem Nyakutu said.
The review, combined with the thousands of civil servants set to retire in the year to June next year, will see the pension bill rise from Sh55.6 billion in the current financial year to Sh71.8 billion in the next budget.
Part of the pension time bomb build-up has been attributed to the government’s failure to push through necessary reforms, including kick-starting the long awaited contributory pension scheme.
The time bomb has continued to grow despite the decision eight years ago to increase the retirement age from 55 years to 60 years.