Retirement benefits dilemma haunts Jubilee

By KENNETH KWAMA

Five years ago, the Government increased the age of retirement for its workers from 55 to 60.

The move was to give Government time to raise money to pay off thousands of workers retirement benefits.

The argument then was that at 55 years, people who were to be retired were still productive. Others contended that the cumulative on-job experience of this lot was too valuable to be dispensed with that early.

The workers rejoiced when the retirement age was increased to 60. For the Government, it was temporary relief as it had bought itself another five years to raise enough cash to deal with the issue.

The grace period is now over and according to reports published by The Standard last Tuesday, the Government is mulling over ways to get money to pay the retirement benefits of close to 20,000 workers who will be exiting their duty stations starting April 1 next year.

Although the pension story is a bit clouded, coming at a time when the Government is trying to sort out the teachers’ strike, the issue of a pension fund and ways of getting money to bankroll a successful programme was first discussed in Kenya in 1963.

Provident fund

Half a century ago, The East African Standard published a story titled Pensions for All Planned, detailing discussions on the matter. The paper stated that proposals for a compulsory national provident fund to provide security in old age were to be sent to the Government.

“The Minister for Labour and Social services, Mr Mwendwa, has been having discussions on the scheme in London with Mr E Turner, an official of the British Ministry of Pensions. Mr Turner recently spent six weeks in Nairobi advising the Kenya Government on the setting up of an old age pension scheme,” stated the paper.

  The best pension scheme model Kenyan leaders wanted to emulate then was one that was being run by the Nigerian government. Mr Turner was reported to be keen on the “highly successful Nigerian scheme, which after only two years had paid off a government advance and had two million pounds balance”.

The Kenyan government went on to establish a pension fund. The programme, whose main face is the National Social Security Fund (NSSF), has recorded mixed results since its inception, although there are pointers that it is headed in the right direction.

Unlike the situation a decade ago when retired workers could follow up their benefits for up to five years, the turnaround time has greatly reduced at NSSF. There are instances where retirees have been paid their dues in under a week.