Economy

Boost for retirees as pension claims set to go digital

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Treasury building. FILE PHOTO | NMG

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Summary

  • Treasury wants to automate submission and processing of pension claims in bid to pay retired civil servants within a month and eliminate backlogs.
  • The Treasury says that the current system of handling claims is heavily reliant on movement of voluminous hardcopies of pension papers from one office to another leading to financial and mental suffering for retirees.
  • Treasury says that it is currently servicing dues of about 300,000 pensioners registered at the department for pensions with an average of 20,000 new claims being lodged annually.

Treasury wants to automate submission and processing of pension claims in bid to pay retired civil servants within a month and eliminate backlogs.

The Treasury says that the current system of handling claims is heavily reliant on movement of voluminous hardcopies of pension papers from one office to another leading to financial and mental suffering for retirees on delayed receipt of their benefits.

Treasury is now seeking for a consultant to develop, supply, install, and commission an online pension management information system that will eliminate the need for pensioners and their family members to make physical visits to various offices to apply and follow up on pension payments.

Treasury says that it is currently servicing dues of about 300,000 pensioners registered at the department for pensions with an average of 20,000 new claims being lodged annually.

The Treasury has budgeted Sh119.19 billion towards retirees benefits in the current financial year to June— an amount which is nearly three-and-a half times more than the Sh27.71 billion allocated seven years earlier.

The State in January rolled out the long-awaited Public Service Superannuation Scheme (PSSS) where all civil servants make monthly contributions for their pension, with the main reason being to control the huge pension bill.

More than 530,000 civil servants, including police and teachers, contribute two percent cut from their salaries for their pension contribution.

The contribution will increase to five percent in the second year and 7.5 percent in the third year.

Under the scheme, civil servants will cede about Sh2.4 billion monthly or Sh28.8 billion annually to the fund that will emerge as Kenya’s largest pension scheme.

The surge in claims amid the slow processing process has led to backlog of cases not adjudicated and paid mainly due to loss of documents and repetition of processes.

The new system will be expected to address such challenges by offering round the clock capability to apply for pension payment and send auto-alerts to applicants on the progress.