In the first two months of the current fiscal year, Kenya’s pension bill decreased by Sh17. 94 billion compared to the same period last year, relieving strain on the Treasury; which has been struggling with heavy expenditure on retired civil officials.
The cost for July and August is equal to 3% of the Sh171. 83 billion set aside for pension payments in the fiscal year that ends in June of next year. For the 2021/22 year, the Treasury had set aside Sh153. 69 billion for pensions.
However, it is anticipated that the pension bill would gradually decrease over the next years as more federal officials switch to the contributory plan, which was implemented at the beginning of the previous year. All new and serving State employees under the age of 45 were no longer eligible for the old non-contributory program.
Public service superannuation system (PSSS) employees currently contribute 7.5 percent of their monthly pay, with the State matching that amount at a rate of 15 percent of each employee’s monthly wage.