Resolve the staff pension crisis in public institutions


Pension funds concept. FILE PHOTO | NMG

The public pension crisis caused by the management of State-controlled entities must be resolved as quickly as possible and those found culpable held accountable.

Postal Corporation of Kenya is the latest to be found to have failed to remit staff pension and gratuities amounting to Sh1.3 billion. It also withheld Sh108.5 million to co-operatives and Sh305.6 million owed to banks from which its employees had taken loans.

The finding by Auditor-General Nancy Gathungu are shocking but still pale in comparison to similar financial repression that has been going on in other State-controlled entities on a larger scale.

The University of Nairobi, for instance, had failed to remit pension contributions amounting to Sh3.2 billion as of June 2020.

It goes without saying that employees of these institutions are facing big losses even as they are required to keep their end of the bargain. Those who are counting on their pensions to fund their lifestyle in retirement will find it particularly rough.

It is an offence to fail to remit the statutory deductions and there are penalties for that, including jail terms. But there has been no enforcement of the law with regard to the violations that are ongoing in the government institutions.

There is no excuse for this. The entities are not completely bankrupt. They continue to operate and sometimes even receive financial support from the government.

That monies due to employees are being withheld indefinitely while spending on other areas underlines the disregard for workers’ rights and impunity in the public sector.

This is a problem that should have been nipped in the bud. Two key stakeholders should use their leverage to resolve this crisis. The Treasury needs to come up with a strategy to force the institutions to fulfil their obligations to employees.

This may include requiring compliance with the law on statutory deductions before such organisations access funding. The unions must also put pressure on the employers to remit the amounts due.

They have been eerily quiet on this matter despite its grave implications. What we have witnessed is random protests in various parts of the country by frustrated retirees unable to access their pension benefits.

Justice demands that we do right by our workers.