Time flies with great content! Renew in to keep enjoying all our premium content.
Prime
Queries as rejected pension cash transfers hit Sh13bn in a year
Auditor General Nancy Gathungu making a presentation during the 8th Public Finance Management (PFM) Conference on November 5, 2025, at the Grand Royal Swiss Hotel, Kisumu.
The whereabouts of thousands of retired public servants is in question after Sh13 billion pension payments to their accounts bounced back mainly due to inaccurate banking details.
A report on the government’s pensions and gratuities says that the value of unsuccessful cash transfers to pensioners’ accounts rose to Sh12.9billion in the year ended June 30, 2025, up from Sh7.1 billion the previous year.
This has resulted in the government holding billions of shillings owed to retirees and their dependents, as it faces allegations of lacking a strategy to identify and trace them.
Auditor-General Nancy Gathungu revealed in a report on pensions and gratuities payments under the Consolidated Fund Services (CFS), that payments failing to go through to retirees' and dependents' accounts increased by Sh5.8 billion in the year ending June 2025, before which it had grown by Sh394 million the previous year.
“The statement of financial position reflects a payables balance of Sh12,985,397,296, which relates to returned pensions (re-credited cheques) for beneficiaries whose accounts experienced failed credits,” the audit said.
“The audit revealed that the returned pensions amount has been increasing over the years (financial year 2023/2024 - Sh7,109,779,106, financial year 2022/2023 - Sh6,715,563,752),” it added.
The growing amount of pension payments that aren’t going through to retirees' and dependents’ accounts has raised concerns over where they are, as the State is put on the spot for failing to find them and give them their money.
The government administers pension payments to thousands of public service retirees through the Pensions Department, under the Treasury’s Directorate of Public Investment and Portfolio Management.
The department manages various schemes that serve a diverse group of retirees and their dependents, including Presidents, Deputy Presidents, Prime Ministers, and other senior State officers, and public servants such as teachers and uniformed officers.
The public auditor reckons that while the State says it plans to implement a plan to identify beneficiaries and the billions of shillings or their dependents, the unclaimed balances have continued to grow, even as some of the payment details are realized to be faulty.
Out of the Sh12.9 billion pensions that have bounced back, the audit notes that payments valued at Sh8.9 billion lacked names and pension numbers of beneficiaries, thus rendering them impossible to sail through to beneficiary accounts.
“This trend raises concerns regarding the adequacy of follow-up mechanisms, the accuracy of pensioner payment details, and the timeliness of reconciliation processes for failed transactions,” Ms Gathungu said.
An aging analysis for the unpaid pensions shows that debts that have been outstanding for a period of less than a year grew from Sh418 million in June 2024 to Sh5.9 billion in June 2025.
Pensions that have been outstanding for periods between a year and three years stood at Sh1 billion, those that were unpaid for four to five years were Sh1.8 billion, and those outstanding for over five years stood at Sh4.2 billion.
“Further, the re-credited funds were not available in the bank accounts to pay the returned pensions in the event of a claim by the beneficiaries,” said the public auditor.
