Retired teachers to get up to Sh1m each in pension arrears

A section of retired teachers appear before High Court Judge Janet Mulwa in Nakuru in May. Some of them will take home a cool Sh1million as the State starts processing their pension arrears. Some retired teachers are set to receive up to Sh1million each in pension arrears as the State moves to end a 19-year pay dispute. (PHOTO: BONIFACE THUKU/ STANDARD)

Some retired teachers are set to receive up to Sh1million each in pension arrears as the State moves to end a 19-year pay dispute.

The Pensions Department has started processing Sh1.5 billion, which is part payment of Sh16.4 billion owed to 32,000 retired tutors. This comes after the Government lost all court battles to block the pension arrears, which have subjected thousands of retired teachers to almost two decades of abject poverty.

The Pensions Department said it had received Sh1.5 billion from the National Treasury to jump-start the payment plan, which will be implemented in phases.

"We have started paying and I am already processing the first 400 cases. There are some who are getting as high as one million shillings," Director of Pensions Shem Nyakutu told The Standard.

Nyakutu, who was recently arraigned to answer contempt charges over the delays in payment, said about 32,000 former tutors will benefit from the enhanced pension instalments.

The Standard saw some of the files that had been brought for final signatures by Mr Nyakutu.

The department said it owed Sh16.4 billion to retired teachers and would be seeking additional funds through supplementary budgets to continue with the payments.

Only teachers who retired between July 1, 1998 and 2003 will benefit from the windfall. Those who exited in 2003 stand to receive the fattest cheques from the pensions body.

banking problems

"Teachers who retired before July 1, 1988, will get nothing. We have some banking problems which we are dealing with," said Nyakutu. And it is not only retired teachers who are set to enjoy improved pension.

The Pensions Department has announced a raft of reforms to bring to an end the frustrations of civil servants, who have to endure a painful wait before receiving their dues.

The contributory civil servants pension scheme will start next year, as Government moves to share the ballooning pension bill with civil servants.

Under the new scheme, Government employees will from next July pay 7.5 per cent of their salary to the pension fund. The State will contribute a similar amount, bringing their total pension contributions per month to 15 per cent of their total salary, comparable to the practice in the  private sector and some moneyed parastatals.

"The contributory scheme starts on July 1 next year. It will also enhance job mobility for civil servants. One can leave one employer to the other without losing their benefits. For example, you can move to a parastatal and still keep your benefits," said Nyakutu.

Currently, taxpayers shoulder the entire pension bill for civil servants.

In the past, the Government has been forced to increase the retirement age for some civil servants to delay payments.

Civil servants have also been forced to stay within Government, fearing that they would lose their pension if they switched jobs.

But the new move could upset some civil servants used to taking home their entire salaries.

Nyakutu said the department would also use the exercise to clean the teachers' pension payroll. Teachers do not need to visit the Pension Department's head office at Bima House to update their records.

"We will have officers stationed at Huduma Centres countrywide. They should visit their nearest branches with bank plates and their national Identity cards. Here, they will be given forms to fill in case they need to update their bank details," he said.

The turn of events will be a sweet victory for the Retired Teachers Group of 1997, a Nakuru lobby group that has been fighting the case through the courts on behalf of their colleagues.

The battle between retired teachers and their former employer, the Teachers Service Commission (TSC), started in October 1997 after President Moi's government increased teachers' salaries by between 150 and 200 per cent.

five phases

The increment was to be implemented in five phases. The first phase was from November 1, 1997 and backdated to July 1, of the same year.

But the other phases were not implemented. This saw the retired teachers head to court where they won the first and second rounds of the cases at both the Court of Appeal and later the Supreme Court.

Following the filing of the case, the number of former teachers listed has been swelling and now stands at over 52,000, demanding over Sh42.3 billion in arrears.

Justice David Maraga, who is set to become the new Chief Justice if approved by Parliament, ruled in 2008 against the TSC and ordered it to pay the teachers.

The money has been accruing interest at the rate of 14 per cent since the initial judgement was made by Justice Maraga.

The Government went to the Supreme Court to challenge the decision. But the Supreme Court also ruled against the TSC, and ordered them to pay the teachers.

But the Government has continued to delay the payments, tied in bureaucracy and budgetary constraints.

The Pensions Department currently runs a Sh54 billion budget, larger than the total amount of money allocated to various ministries, including the Ministry of Health.

The pension reforms come at a time when the department has come under scrutiny for causing untold suffering to retirees seeking their dues.

There have been numerous cases of missing files and delayed compensation for families.

It is also feared that there are thousands of ghost recipients on the pension payroll, as legitimate beneficiaries wait.

Corruption has also been rampant at the department, with pensioners being forced to part with facilitation fees to have their files processed.