More than 80,000 former Kenyan civil servants receive only Sh4,000 a month in pension payments. This has prompted MPs to push the government to increase retirees' pay. The National Assembly's Public Petitions Committee has directed the Treasury and the Salaries and Remuneration Commission (SRC) to conduct an actuarial review on financial and budgetary requirements for facilitating more pay to 319,207 pensioners.
The move follows complaints that the group has received low pay despite rising inflation. The Kenya National Association of Public Service Pensioners (KNAPS) petitioned Parliament to have former civil service non-contributory pension schemes merged with the current Public Service Superannuation Scheme (PSSS). KNAPS argues that members of the PSSS enjoy better benefits. About a quarter of its members, close to 80,000, earn less than Sh4,000 in pensions monthly.
The committee recommends that the National Treasury, in liaison with the SRC, conducts actuarial reviews every three years and provides for resultant fiscal/budgetary requirements. The first such actuarial review should be conducted by December 31, 2026. The Association approached Parliament with prayers to have all non-contributory civil service pension schemes amalgamated into a single framework and gazettement of appropriate pension increases to cushion pensioners against inflation and the rising cost of living.
The pensioners also lobbied to have public service retirees considered for positions such as consultancies and mentorships. However, MPs and different government agencies have rejected the push to merge the old pension schemes with the PSSS, citing potential liabilities. The Retirement Benefits Authority (RBA) told MPs that the government would first need to pay all accrued liabilities of the non-contributory scheme, estimated at over Sh1 trillion.
The government initiated the transition from the old pension scheme to the PSSS in January 2021. Membership of the PSSS has grown to 529,635 as of June 2026, accounting for 78 per cent of the public service pension industry. The old pension scheme had a membership of 319,207 as of July, with new membership blocked as the government moves to the contributory framework.
Treasury says it spends about Sh7.8 billion monthly to pay the 319,207 pensioners, totalling about Sh93.7 billion each year. On the other hand, the 529,635 public servants saving under PSSS have accumulated Sh343.75 billion in savings. While Treasury acknowledges the impact of inflation on pensioners' purchasing power, it insists that an actuarial recommendation provides an important technical basis for policy consideration but does not automatically create a legal or fiscal obligation to implement a particular level of pension increase.
The SRC and State Department for Public Service also emphasized the need to ensure affordability and sustainability of payment of pension to all eligible public officers and their beneficiaries. Pension firms are now eyeing informal sector workers, seeking to step up the rollout of micro pension plans. The court has also quashed a bid to remove the KRA boss over retirement age.
Key points
- Over 80,000 Kenyan retirees receive only Sh4,000 a month in pension payments.
- MPs have directed the government to table a report on budgetary requirements to increase pension payments to 319,207 retirees.
- The government faces financial challenges and hurdles in implementing pension increases.
