Payments to retired public servants lagged the Treasury’s target by more than Sh20 billion in the first nine months of this financial year, latest exchequer data shows, pointing to a growing backlog in disbursements.
Exchequer data, the Treasury published last Friday, shows expenditure on pensions and gratuities to retired civil servants, teachers, police and military personnel amounted to Sh60.05 billion in the period July 2020 to March 2021.
This is Sh23.29 billion below a prorated goal of Sh83.34 billion, pointing to slower processing of claims than budgeted.
The payouts to retired civil servants amounted to Sh53.82 billion, falling short of the Treasury’s goal of Sh62.02 billion.
The backlog in retiree payroll is piling despite Treasury secretary Ukur Yatani pledging last June that it would be cleared by December 2020 to pave the way for transition to the new contributory pension scheme rolled out in January.
Mr Yatani disclosed on Friday the budget for retirees for this fiscal year ending June has been slashed by Sh8.05 billion to Sh111.14 billion compared to what had been approved in the initial estimates.
The payouts in the nine-month period through March 2021 were Sh4.1 billion lower than the Sh64.16 billion processed last financial year.
“We are catching up and whatever that we were not able to process…we shall make up in subsequent quarters, and by close of the financial we shall have regained what we lost,” Director of Pensions at the Treasury Michael Kagika had said in an earlier interview.
“We do not want retirees to wait for unnecessarily long time before they can access their pension.”
The Treasury rolled out a contributory pension scheme where Public Service officers are now contributing two percent of their gross pay towards retirement savings, deductions which will rise to five per cent next year and 7.5 per cent thereafter.