Kenya’s public pension bill has crossed the Sh200 billion mark for the first time, reflecting a growing financial strain on the government at a time when many retirees are still waiting for their delayed dues.

The National Treasury spent Sh207.19 billion on pension and gratuities in the financial year ending June 2025, a sharp 39 percent increase from Sh148.9 billion paid out the previous year.

This marks the first time in the country’s history that spending on pensions has surpassed the Sh200 billion threshold.

This rising expenditure now accounts for 11.6 percent of total payments made through the Consolidated Fund Services (CFS), compared to 8.4 percent a year earlier.

The surge comes amid increasing pressure on public finances, with many pensioners still experiencing long delays in receiving their payments.

“There have been challenges when pensioners leave employment and wait for too long to get their payment, mainly because of system challenges. There are also other issues behind delayed payment of pension,” Treasury Cabinet Secretary John Mbadi recently said.

Despite the record payout, the Treasury missed its full allocation target, disbursing 92.8 percent of the Sh223.14 billion it had set aside for pension and gratuities.

The delays and funding gaps have sparked concerns over the sustainability of the pension system and the government’s ability to meet its obligations in time.

Pension, public debt, and the salaries of constitutional office holders are the key items funded through the CFS. However, public debt continues to consume the lion’s share.

In the year ending June 2025, debt repayment accounted for 87.1 percent of the Sh1.79 trillion CFS budget, down slightly from 90.3 percent the previous year, when the total CFS budget stood at Sh1.766 trillion.

The number of public service retirees is also growing rapidly.

More than 260,000 retirees are currently receiving pensions, and the figure is expected to rise even further, with at least 85,000 more civil servants projected to exit service between last year and June 2026 after turning 60.

Over the last four years, expenditure on pensions has risen by 87.8 percent, from Sh110.36 billion in the 2020/2021 financial year.

This surge is putting additional pressure on the Treasury at a time when the country is struggling to manage ballooning public debt repayments.

The increasing pension burden recently prompted the Treasury to oppose a proposed law that would have seen pensions adjusted for inflation.

The aim of the bill was to help cushion retirees from the rising cost of living. However, the government is separately considering introducing a cost-of-living adjustment specifically for judges’ pensions.

With the fiscal space narrowing and the number of retirees on the rise, the ballooning pension bill remains one of the biggest challenges the Treasury faces, even as delays in disbursement continue to frustrate retired civil servants who rely on these payments for survival.