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Pension bill down Sh18bn in first two months of 2022 – Business Daily

Treasury building in Nairobi on June 11, 2020. PHOTO | SILA KIPLAGAT | NMG
Kenya’s pension bill was lower by Sh17.94 billion in the first two months of the current fiscal year compared to the corresponding period last year, easing pressure on the Treasury that has been grappling with high expenditure on retired civil servants.
Latest data from the National Treasury shows that Sh5.32 billion was spent on pensions in the period, a 77.1 percent drop from same period a year earlier, gazette filings by the Treasury show.
The Treasury did not disclose the reason for the drop at a time the country has been witnessing a sharp rise in number of retiring State staff.
The bill for July and August represents three percent of the Sh171.83 billion allocated for pension payments in the financial year ending next June. Treasury had allocated Sh153.69 billion for pension in the 2021/22 year.
There is an expectation though of the pension bill to fall progressively in coming years as more civil servants transition into the contributory scheme that was rolled out at the beginning of last year. The old non-contributory scheme was closed to all new and serving State employees aged below 45 as at January 1, 2021.
Civil servants now contribute 7.5 percent of their monthly pay to the scheme dubbed Public Service Superannuation Scheme (PSSS) with the State matching it at a rate of 15 percent of every worker’s monthly salary.
PSSS had attracted more than 352,000 members as at April valued at Sh27 billion, according to disclosures by the National Treasury.
Roll-out of the scheme ended a nine-year wait as Treasury faced opposition in its bid to slice a portion of civil servants’ pay to ease pressure on the Exchequer on the back of an increasing number of retirees every year.
Treasury, however, failed in bid to see the National Treasury amend the National Social Security Fund Act 2013 and increase contributions to 12 percent of workers’ salaries, up from the current uniform rate of Sh200.
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Finance specialist with courses ranging from corporate finance, perfonal finance and startup finance. Msc. Acturail Science, Bsc. Finance, COP Insurance and phD. Business Advministration -FInance(ongoing)

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