Treasury to clear pension payment backlog

Pensioners can breathe a sigh of relief after the government said it will clear all pension payments backlog by the end of the calendar year.

In this regard,  the CS said the National Treasury is re-engineering and upgrading the pensions system in order to clear all pension payment backlog by the end of the calendar year.

“This will pave way for a modernized pension management system that will guarantee smooth transition of retirees from a monthly salary cheque to a monthly pension payment”, he said.

To ease the pension burden on the exchequer, Yatani said the National Treasury will roll out Public Service Superannuation Scheme (PSSS) adding that the government is developing a National Retirement Benefits Policy that will harmonize all the pensions laws.

“This will strengthen the legal and regulatory framework to achieve a comprehensive pension coverage across the formal and informal sectors and better protect the interests of beneficiaries and rights of pension contributors,” he said.

The CS said National Treasury will pursue all legal means to ensure the County Governments Retirement Scheme is operational to safeguard members’ pensions.

In 2019, Parliament approved the County Governments Retirement Scheme which provides for the establishment of an umbrella retirement scheme for county governments but was halted by the court after a petition was filed challenging the law.

The Government is working on establishing a National Micro-Pension Scheme with a sustainable model that combines long-term saving with short term needs that will be open to all marginalized informal sector workers who constitute over 80 percent of Kenya’s labour force.

The CS in his Budget 2020/2021 highlights is further proposing to amend the Retirement Benefits Authority (RBA) Act to impose a penalty to Pension Schemes that fail to submit actuarial valuation reports to the Authority within the specified timeline.

The actuarial valuation reports are important in determining the performance of the scheme.