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Economy

Jobs, pensions crisis as 37pc of civil servants set to retire

PSC chairperson Margaret Kobia. FILE PHOTO | NMG
PSC chairperson Margaret Kobia. FILE PHOTO | NMG 

A jobs and pension crisis will hit the public service as the number of civil servants set to retire in the next decade rose to 37 per cent.

The Public Service Commission (PSC), in a report to Parliament, said the percentage of civil servants above the age of 50 increased from 35 per cent in the year to June 2016, to 37 per cent last year.

This means that 66,000 civil servants will retire before 2027 amid fears that the State will be forced to retain some workers beyond the retirement age of 60 due to a skills shortage.

“The service had an aging workforce, with 37 per cent of officers being 50 years and above as at June 30, 2017, compared to 35 per cent in the same period in 2015/16 financial year,” the PSC, chaired by Prof Margaret Kobia said.

The most affected staff are in the senior management levels and technical cadres with critical skills and competencies.

The government plans to introduce management trainee plan this year to fast-track graduates into executive roles, trigger promotions and review blanket ban of fresh hiring to ease effects of the ageing workforce.

This would have an effect on the ballooning wage bill.

Half of revenues

Public servants’ salaries consumed half of all revenues and were impeding spending on development projects in Kenya, a country mired in poverty where the unemployment rate stands at about 40 per cent.

More workers beyond 60 years will also be placed on contract, says PSC.

The retention of the old blood has been blamed on a lack of a mentoring programme in public service for junior staff to succeed their seniors in executive roles.

The Treasury will also need to set aside billions of shillings as pension costs for the thousands of exiting workers who do not contribute for their pensions.

Estimates from the Treasury show that the annual pension bill will hit Sh55.6 billion in the current financial year ending June and will rise to Sh71.8 billion in the year ended June 2018, making it one the largest budget items. The bill has risen from Sh15 billion in 2002.

Over 46 years

“Majority of employees in management positions (Job Group P and above) are over 46 years,” PSC said earlier.

Only 19 per cent of the civil servants were aged 19-35years in the year to June 2016. Another 13.9 per cent are aged 36-40 years while 14 per cent of them are between 41 and 45 years.

Economists warn that the pension crisis will grow more acute because the government has delayed plans to have civil servants contribute monthly to a fund that will pay for their retirement.

The contributory pension scheme was mooted in 2009, but roll-out has been suspended more than thrice.

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