Treasury on the spot over Sh86 billion unpaid pensions
The Treasury, which defaulted on Sh23 billion last year, is now banking on a new Pension Management System to streamline access and reduce pressure on its cash-strapped operations.
Thousands of retired public servants risk being left without their dues before the close of the financial year, after the Treasury failed to pay out over Sh86 billion in pensions by the end of April, prompting concerns in Parliament over neglect of non-negotiable obligations.
In its analysis of the Consolidated Fund Services budget, the National Assembly’s Public Debt and Privatisation Committee said the Treasury had only disbursed Sh136.9 billion out of Sh223.14 billion allocated for pensions by April. The remaining balance may not be settled before the end of June.
“This level of under-performance is concerning, particularly given the statutory and non-discretionary nature of pension obligations which are critical to the welfare of retired public servants,” the committee said.
The delays, the committee added, come on the back of an earlier Sh23 billion that the Treasury failed to allocate to pensions and gratuities in the previous financial year. This growing trend has left many former public workers in distress, with some being forced to personally pursue their dues at Treasury offices in Nairobi.
The number of retirees is also rising sharply. Treasury projections show 85,000 more public servants will retire between last year and June 2026 — including 30,155 in the 2023/24 year, 28,745 in the current financial year, and another 26,500 in the next one.
These numbers are expected to increase the pressure on the government, whose debt servicing costs are already squeezing out resources. Between July and April, debt repayments amounted to Sh1.25 trillion, taking up almost 70 percent of the total tax collected in that period, leaving little room to meet pension obligations or finance other critical projects.
The Treasury’s failure to keep up with pension disbursements also threatens to widen arrears and delay payments for incoming retirees. The committee warned that unless urgent action is taken, the government will continue to default on its responsibilities to those who have already served the nation.
In response, Treasury plans to launch a new Pension Management System from July 1. The system will enable pensioners to access services remotely, track claim status in real-time, and allow government departments to submit claims electronically through an integrated human resource platform.
