The Treasury has revised downwards its pension payment plan by Sh17.5 billion in yet another blow to retirees already grappling with delays in the processing of their benefits.
Expenditure on pensions and gratuities is now estimated at Sh86.99 billion from Sh104.89 billion that the Treasury had initially budgeted, latest exchequer statistics covering 10 months through April 2020 show.
Retirees’ payroll, however, still hit a record Sh71.84 billion between July 2019 and April 2020, a growth of 36.44 percent or Sh19.19 billion, compared to the same period a year ago largely because of a rapidly ageing workforce in the public service.
Pension payments have continued to pile pressure on taxpayers despite a knee-jerk policy decision nine years ago to raise the retirement age in public service from 55 to 60.
Processing of the benefits to the senior citizens for their service to the nation had lagged the Treasury’s target by Sh14.21 billion in the first nine months of the current fiscal year through March before the full-year goal was cut in April.
Treasury secretary Ukur Yatani had said in February “the shortfall…was due to slower than targeted processing of pension payments”.
Part of the pension build-up has been blamed on the Finance ministry’s failure to implement necessary reforms, including starting the long-delayed contributory pension scheme despite the law having been enacted in 2012.