Bill seeks to cut long wait for civil servants’ first pension

Retired civil servants will receive their first pension pay within three months after approval of the benefits if a proposed law sails through Parliament.

The Pensions Amendment Bill, 2020, currently before Parliament, seeks to cap the waiting period before they start enjoying the monthly pay meant to cushion them from financial difficulties once they exit service.

“The principle objective is to amend the Pensions Act Cap 189 to provide a timeline within which pension shall be payable to an officer,” Kimilili MP Didmus Barasa who is sponsoring the amendment says in the bill’s memorandum.

“The bill seeks to remedy delays in payment of pension after it has become payable.”

Currently, lack of a law on when the State should start paying pension has left many retirees struggling even after getting clearance and approval from line ministries and agencies.

Pension pay has remained on a steady rise in recent years on the increasing number of civil servants seeking exits which has in turn piled more pressure on taxpayers.

The State raised the retirement age from 55 to 60 nine years ago in a bid to ease the pension pressure on taxpayers.

Treasury budgeted Sh104.49 billion towards retirees’ payroll in the year ended June, a rise of 596 percent from Sh15 billion in 2002 reflecting the rapidly aging workforce.

Pension pay for civil service retirees has been allocated Sh121 billion in the year to next June, but civil servants will from January start contributing to their pension in a move to ease the burden on taxpayers.

The more than 530,000 civil servants who include police and teachers will see their pay cut by 7.5 percent as they start contributing to the soon to be created Public Service Superannuation Scheme (PSSS).

This means that State workers will cede about Sh2.4 billion monthly or Sh28 billion to the PSSS fund making it Kenya’s largest pension scheme.