Pensioners and their dependants may be poised for bad news after National Treasury Cabinet Secretary Henry Rotich announced a raft of changes to be implemented in the pensions budget, due to the burdensome wage bill.
While addressing the National Assembly on Thursday when tabling the 2019/2020 Financial Year Budget, Rotich said that ballooning wage bill was a serious concern and as a consequence, the Government had proposed various mechanisms including pension reforms.
Under the reforms which target the retirees, Rotich said that some pension benefits may be scrapped to ease the burden on the exchequer. He was however not categorical on the services to be limited.
“In order to contain the wage bill, I propose that we limit strictly the extension of service for the significant number of civil servants who are retiring after the age of 60 years,” he said.
The CS said that the wage bill-cutting move will affect recruitment of various professionals into the public institutions. He added: “We will restrict new recruitment to key technical staff, security personnel, teachers and health workers. Further, Mr. Speaker, a cleansing of the wage bill will be undertaken to root out ghost workers.”
He said that the Government will also shift from the Integrated Payroll and Personnel Database System (IPPD) to IFMIS Human Resource Module to facilitate seamless payroll management system.
Rotich lamented the upward scaling of the pension budget in recent years terming it uncontainable for the exchequer.
“Mr. Speaker, the pension budget has increased by over three-fold in the last 10 years from Ksh 25 billion in FY2008/09 to Ksh 86 billion in FY 2018/19. This is unsustainable,” he said.
The Treasury boss further revealed that in May 2019, his ministry conducted a clean-up exercise at the Huduma Centres countrywide and ascertained that there are 270,000 pensioners and dependants receiving money from the Government.